Trustees and companies sometimes struggle to manage in-house pension scheme administrators, especially where accountability is unclear. Often the risks that are being taken are not apparent.
When Woodley Trustees were appointed Chair of one pension scheme, we quickly came to the view that the in-house administration function had significant weaknesses. No strategic thinking had been applied by the trustees or the employer to this in-house function which was under-managed. We worked with the sponsoring company to develop a robust understanding of the issues and reviewed the options available.
Following the review, it was agreed to outsource the administration function. We then ran a process to select an external administrator and negotiate a tight contract.
Since the new appointment, standards have improved considerably. The trustee board has a much higher level of comfort around the risks in this area. The trustees have received very positive feedback on the new administration arrangements from the auditors.