UK - The government is considering legislation to ensure trustees meet their responsibilities in raising administration standards, a leading industry action group claims.
Members of the Raising Standards of Pensions Administration project – a voluntary initiative launched in January 2002 – have been assured by pensions minister Malcolm Wicks that he is aware of the need to reduce the number of errors in the day-to-day running of schemes.
Wicks told the group that he had “sympathy” with the need to remind trustees of their duty with regard to administration and was considering how this could best be achieved.
RSPA group steering committee member John Reeve said: “While there is an admirable requirement in new legislation for trustees to be more knowledgeable, the only responsibility specifically mentioned is in respect of investment. Trustees also need to focus on their responsibilities with respect to administration.”
The warning follows the publication of the annual report by the pensions advisory service OPAS, which revealed 65,902 complaints and inquiries had been received during 2003-04 – an increase of 5000 (8.3%) on the previous year.
Complaints directly attributable to poor administration, such as errors, delays, misquotations, accounted for 30% of the cases dealt with – a “substantial increase” on last year.
OPAS chief executive Malcolm McLean (pictured) said there was increasing concern about the growing number of complaints relating to administration and the day-to-day running of pension schemes.
He said: “A culture seems to be developing where quality and good customer service are considered dispensable in the ever-persistent quest to drive down costs.
“This is short-sighted and members are entitled to expect more from their schemes.
“We would like to see this trend reversed with an emphatic raising of standards all round.”
Pensions Management Institute president Roger Cobley said administration had been the “poor relation” of pensions for too long.
He said: “Ultimately trustees are responsible for running a pension arrangement so, before they delegate the administration of their scheme either ‘in-house’ or to a third-party administrator, they should inquire whether the staff involved hold qualifications.
“Although well-run schemes need good computer systems it is imperative these are operated by competent staff – people, not computers, run pension schemes.”
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Malcolm Mclean says getting the channels of communication right and engaging more openly is a good starting point