We’ve rightly recognised the hard work and sacrifices the UK’s key workers have made while fighting this virus.
But the pension industry should also take time to reflect on the efforts of our administrators.
After all, they’ve been instrumental in ensuring benefits, which some rely on to stay fed and healthy, are being paid.
Too often administrators are taken for granted, but situations like this show how pivotal they are.
Without their hard work to keep benefits paid in the face of the COVID-19 crisis, those who rely on that money would have faced real hardship at an already difficult time.
Good administration is vital
Administration is an absolute core function in a pension scheme. It’s one The Pensions Regulator has highlighted for some time. For most savers, administrators are the face of their pension. Savers won’t speak to trustees and are unlikely to know who manages their investments.
That’s why earlier this year we revealed plans to build stronger relationships with a number of strategically important administrators. We’ve been working with groups such as the Pensions Administration Standards Association (PASA) to share best practice and drive up standards across the board. We knew forming meaningful two-way dialogues would be essential to delivering these higher standards.
When the pandemic struck we reached out to administrators large and small which, collectively, represent more than 40 million memberships.
Our conversations revealed a single-minded focus on ensuring benefits were paid, retirements were processed, and, soberingly, deaths were processed. Discretionary work was put on hold and staffing issues overcome to ensure these key processes were delivered.
This wasn’t by chance. Robust business continuity planning hugely contributed to administrators’ ability to get up and running in this new socially distanced world. This preparation on business continuity and resilience is something to learn from and trustees and scheme managers must look at this with a renewed focus.
Some mistakes will happen
We accept that, inevitably, this unique situation has caused some administrative issues to build up – whether it’s non-priority queries left unanswered, or data errors which will need to be corrected as HR teams grapple with implementing the furlough scheme.
Speaking to administrators has helped us understand where issues might arise and where we can help to mitigate them. That’s why we amended our guidance to urge trustees and administrators to maintain means of contact for the digitally disengaged, who are potentially more vulnerable.
The country may be itching to get out of lockdown and return to ‘normal’ but this won’t be a simple process for anyone, including administrators.
Trustees and scheme managers must continue to be pragmatic and supportive to ensure administrators can keep delivering priority activities without ‘burning out’.
Expectations about how quickly administrators may be able to return to discretionary work must be realistic and consider the impact of both a spike in workload and challenges in addressing it.
Our research has highlighted ways some trustees and scheme managers have already been supporting administrators, including:
- Co-operation around reviewing cashflow policies, holding additional cash or providing access to extra liquidity.
- Moving to electronic signatures as well as electronic copies of documents where possible.
- Adapting processes for agreeing discretionary benefits.
- Promoting online services and email in recorded messages and member inserts to minimise demands on call centres.
COVID-19 has really demonstrated what can be achieved when trustees and administrators communicate and co-operate. This must continue as lockdown measures are eased and in the long term, to provide savers with the services and pensions they deserve.
The coronavirus has delivered important lessons we can build on. First, now is the time to recognise the work of administrators isn’t just admin – it’s vital to savers. And second, there are lots of ways administrators can be supported to deliver high-quality work – and we should take every opportunity to do that.
By David Fairs, Executive Director of Regulatory Policy, Analysis and Advice