Good scheme admin matters – are you thinking about it enough?
Flick back through your trusted trustee meeting packs and you’ll find, doubtless tucked away somewhere near the back, the quarterly admin report.
Always there. Always in the same format. (Almost) always rushed at the end of the meeting. Because, frankly, scheme administration is not amongst pensions’ glamour topics, is it?
Were your scheme a football team, the investment gurus, the actuaries – perhaps even, occasionally, the lawyers – would be the subjects of fawning fans.
Shirts emblazoned with “9 – Consultant” would fly from shelves, while those pre-printed with “2 – Administrator” would lay crumpled in the corner. No child hangs the poster of a right back on their wall, do they?
And yet whereas once full backs simply made up the numbers, modern managerial geniuses – the likes of Pep Guardiola and Mikel Arteta – show them the appreciation they deserve.
Which is (albeit in a way that is admittedly as tenuous as it is roundabout) the lesson pension trustees can learn from a pair of sharply dressed, immaculately styled, Spaniards. Love thy administrator, do unto them as you would have them do unto you. Pensions life is much more fruitful that way.
Build the relationship…
We’ve already mentioned admin reports. Generally, dry documents, right? And only a limited amount can be gleaned from their pages.
Much better then, to seek both colour and context through regular administrator engagement: better member outcomes are driven by both parties understanding each other’s expectations.
Trustees are no less responsible for scheme administration than they are, for example, for scheme funding. You check in frequently with the scheme actuary, so why not with the administrator?
A strong relationship should breed a culture of collaboration and improvement. That in turn should help to manage risk, with the majority of member complaints related to admin issues.
But remember too that only a tiny proportion of things go wrong. Many of us have sat through the awkward bit of a trustee meeting, the part where a third-party administrator takes disproportionate flak. And so, quite understandably, that same administrator may get defensive when you raise a tricky issue. So, where praise is due – which is often – dollop some out. Keep the whole squad happy, not just your star players, and you will go far.
While administrators are not advisers, they are the ones with daily member dealings. They have a different view of the pitch and can bring perspective lacking amongst those a little further removed. That insight could be invaluable…so here’s a thought: ask for it. World-class performance comes about in part through feedback. What are members habitually getting wrong? What don’t they understand? How can communication be improved?
A good administrator – whilst not there to provide advice – can help to support members with their pensions savings journey. They are more likely (and able) to do that if they have a good working relationship with you. Happy members, happy trustees and happy sponsor.
You can’t turn a pensions corner these days without your nose touching a project. They are, much like inverted wing backs, in vogue.
Yet, one simple tactical error is commonly made. Picture this – you’ve sat through call after strategy call. Trouble has been shot; a plan has been hatched. Then, at the last minute, the administrator is looped in, told what is required, and expected to crack on. Except it is rarely that simple. There is an administrative capacity crunch, and “how high” is not a realistic answer to “can you jump?”.
Why not then, bring administrators into the picture early? Find out, in advance of making decisions, what your administrator can do, and when they can do it. Then plan accordingly.
Data, data everywhere…
Administrators are the gatekeepers of data, and pension schemes have a lot of it.
Over the season, a team will face a variety of opponents, each requiring a slightly different approach. The same is true with data. The data needed on a business-as-usual basis, may differ from the data required for change or “end game” projects. What you need for GMP equalisation on the one hand, may not be the same as for pensions dashboards, but could efficiencies be made from thinking of data projects “in the round”? Talk to your administrators, find out what they hold and work out how the quality of it can be improved.
Holes in data cause issues. How many times have you been frustrated by the lack of an updated address for a long since deferred member? What would you have given for an expression of wish form for that member who moved abroad and has now passed away? Work with your administrator to plug those gaps.