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The opdu
Report - Issue 14, May 2003
Comment
Raising Standards of Pensions Administration
Jocelyn Blackwell
Once again, the Raising Standards of Pension Administration group
has reason to give thanks to OPDU for their support. Back in September
2001 we realised that we shared the view that the risks associated
with poor administration were of concern, at a time when pensions
was going through a period of bad press. Jonathan Bull was kind
enough to sponsor the first meeting to tackle the question of what
could be done to improve matters. Since that first meeting, almost
100 pensions professionals have given freely and generously their
time to work on the first set of guidance notes that launched on
the
www.raisingadminstandards.com
website on 14 May.
There are many publications on the subject of administration and
our challenge was not to duplicate anything already in existence,
whilst still producing something of value. The volunteers decided
that we should concentrate on risk, with particular focus on areas
of administration where experience showed that it was common to
find problems. Some of the areas highlighted for review were: problems
with data caused by badly implemented interfaces between payroll
and pension department, incorrect or incomplete data found when
schemes changed administration providers, inexperience in setting
up new schemes and a serious lack of understanding of the issues
involved in winding up schemes.
We hear that there are increasing numbers of defined benefit schemes
being closed to new members and new defined contribution schemes
being set up. But still, there are relatively few people who have
been through the process of setting up a new scheme. A step by step
guide to setting up a new scheme, highlighting roles and responsibilities,
has been produced by one of the working groups, which we hope will
be useful for all stakeholders.
With so much activity in the outsourcing market in recent years,
it was felt that a guide to migrating between providers of administration
would be useful. One of the working groups has provided guidance
notes and checklists to assist those who are considering changing
the provision of administration services, whether outsourcing for
the first time or switching between providers.
Ongoing administration has been covered in various publications,
but there are still things that go wrong with monotonous regularity.
Another one of the working group has provided case studies throughout
the text of their set of guidance notes, which are intended to illustrate
how to improve the standards of administration through examples
of good administration contrasted with examples of poor administration.
Sadly, an increasing number of schemes are, or are in danger of,
winding up. The final working group has produced a very practical
guide to what is involved with the wind up of a scheme. Here we
must thank Hammonds Suddard Edge who provided valuable legal reviews
of the materials produced.
It is also appropriate to thank Wragge & Co for their legal
input into the both structure of the group and the legal aspects
of the documents produced.
As outgoing chairman of the Raising Standards of Pension Administration
group I would like to thank everyone who has been involved in the
initiative, there are too many to mention individually. I am sure
that many of you will volunteer to help my successor, Michael Goy,
Managing Director of Railway Pensions Management, with the next
stage in the project. We know that there are some gaps where the
work is incomplete, so these must be tackled. And then the group
is to move on to new areas, such as working with the insurance industry
on insured group pension schemes. Finally, personal thanks to Jonathan
and Marcia for their help and support over the past eighteen months.
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