UK - The Occupational Pensions Defence Union (OPDU) last week hosted a discussion forum on Managing Trustees' Expectations of Pensions Administration, which more than 150 pensions managers, trustees, third party administration providers and other advisers attended.
The objective of the evening was to reach a conclusion to the initiative first raised by Dunnett Shaw & Partners (DSP) to help raise the standard of occupational pensions administration in the UK, an initiative that has been running for over 12 months.
Speaking at the event, Bruce Garner, head of pensions at BP, one of the UK’s largest private sector pension funds, said: I welcome unreservedly DSP’s initiative to encourage the creation of a set of pensions administration standards.
He went on to pose a series of questions for schemes which have outsourced, or were considering outsourcing their pensions administration, including:
*Can service delivery performance be measured effectively and reported on to trustees?*Should contractual service level standards be shared with the fund membership in a service charter?*Critically, does it matter to the administrator’s employees if the agreed service standards are met or not?*Where does administration sit in the pecking order? Is it actuarial/investment first, then consultancy, then administration? If so, how can administration be put on an equal footing with these other services?
Bruce Garner summed up by saying: I am convinced that any administrator willing to take on board and work towards the aspirations which lie behind this initiative is much more likely to be successful over the long term in attracting and retaining business than those who are perhaps troubled by this concept.
Michael Goy, pensions director at Railway Pensions Management, which caters for 350,000 members and 130 participating employers, feared that in his many years as an OPAS adviser as an industry we have a poor reputation and a long way to go in service delivery.
He went on to say: We are often perceived as being slow, secretive, inefficient and ineffective – so much so that we need a raft of regulation to push us into communicating with members and providing them with the right to fairly minimal standards of service.
Administration is the Cinderella of pensions – maybe the trustees have just not been interested enough in what we do.
“We need to remember that this is a two-way street. We will want to make clear to the employer what we want from them by way of member data – including the format and timeliness necessary to meet our agreed performance targets. Meanwhile, we should provide them with some means of assuring them that what they are getting is reasonable in relation to the market. So we need some bench-marking or standards to work to.
Jocelyn Blackwell, managing director of DSP, said: Several excellent projects have started over the last year or so, all of which have my full support. What we are seeking to do is to bring the whole thing together. I fear for an industry which already has a shaky reputation, if something is not done in a co-ordinated attempt to improve matters. With the increase in the number of DC schemes, the opportunity to get it wrong is increased many, many times.”
We have put forward a proposal for a set of principles, a code of practice, to help the industry to improve in a systematic way,” Jocelyn Blackwell said, suggesting that interfaces, data transfer, training and tendering processes would be likely first candidates in a developing library.
I am not saying that one size fits all here – the codes would not be prescriptive. I am saying th
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