Key topics for the trustee agenda: a pensions administration perspective

Key topics for the trustee agenda: a pensions administration perspective

Pensions administration is navigating a particularly active period. Trustees and administrators are trying to balance strategic objectives, sponsor needs, and quality member service against a backdrop of increased complexity and risk. In this article, we highlight the top three current agenda items for Trustees from a pensions administration standpoint.
 

Completing GMP equalisation

Guaranteed Minimum Pension (GMP) equalisation has long been a focus for UK pension schemes. It aims to eliminate gender-based inequalities, ensuring a fair distribution of retirement benefits. The process is laborious, requiring complex calculations and potential benefit adjustments for members. Given that most schemes are already working within tight budgets and timeframes, completing the GMP equalisation project is a top priority.

From an admin perspective, accurate data is essential for the project’s success. Effective data management processes must be in place, and sufficient resources need to be allocated for making the necessary benefit adjustments. The quicker this project is wrapped up, the less chance there is of running into issues later on.

However, the bar for successfully completing these projects is high. They require intricate changes to data structures and calculations. With many schemes in the midst of this process, ensuring adequate resources and effective coordination between advisers is vital, making it a challenging set of requirements for pensions administrators to deliver.
 

Cyber security

The evolving digital landscape comes with escalating cyber threats. Trustees are now heavily focused on safeguarding sensitive data and financial assets. Effective cyber security measures include rigorous protocols, consistent monitoring, robust backups and effective assurance regimes.

Ignoring the importance of cyber security can lead to catastrophic outcomes such as data breaches, financial losses, and reputational damage. Given the increasing scrutiny, pension schemes often conduct internal audits and employ specialists to evaluate cyber security measures. Administrators too are now playing a more active role by preparing detailed reports as well as offering training and support to demonstrate compliance and best practice.
 

Maintaining and enhancing member service

At the end of the day, a pension scheme’s primary goal is to serve its members well. This task has become increasingly complex due to evolving benefit structures, more frequent updates to factors, and a wider array of choices for members.

Member expectations are also changing rapidly. They now expect quicker response times when they reach out with questions or issues. As a result, administrators need to be agile and responsive to meet these demands.

Alongside this, a robust digital experience is no longer a ‘nice-to-have’ but a fundamental expectation. With more people accustomed to managing their lives online, pension schemes need to offer intuitive, user-friendly digital platforms.

Communication has always been important, but with member options becoming more complicated, clear and concise communication is critical. Trustees must ensure that all communications are easy to understand, even as the subject matter grows increasingly complex.

Furthermore, with projects like GMP equalisation in motion, resources across the industry are stretched. For this reason, Trustees should keep in close contact with their administrators.

This helps both parties understand resourcing levels, ensuring that projects don’t negatively impact the overall member experience.
 

In summary

Pensions administration is facing a shifting landscape filled with challenges and opportunities. Whether it’s navigating the intricacies of GMP equalisation, beefing up cyber security, or evolving member services to meet new demands, collaboration between Trustees and administrators is key. By keeping an open line of communication and understanding each other’s roles and limitations, we can work together to make our pension schemes as strong and secure as possible for everyone involved.