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Administration

Important

Early draft of the code of practice

This code is not in force yet. It is an early version for the new code of practice consultation.

To give us feedback on issues such as the design, usability and navigation of this code, email us at webfeedback@tpr.gov.uk.

You can also read more information about the consultation.

Published: 17 March 2021

Any scheme depends on the timely and accurate processing of multiple transactions. These range from investing contributions in the scheme, to paying benefits when a member begins to access their retirement funds. A breakdown in any transaction can lead to member losses, and costs to the scheme and employer to put any errors right.

The Occupational Pension Schemes (Scheme Administration) Regulations 1996AD1 set out the records that must be maintained by governing bodies of trust-based pension schemes. Under section 249A of the Pensions Act 2004,AD2 governing bodies of certain schemes must establish and operate an effective system of governance (see Scheme governance) including internal controls (see Managing risk using internal controls). However, there are certain exemptions.AD3

The Public Service Pensions (Record Keeping and Miscellaneous Amendments) Regulations 2014AD4 set out the records that must be maintained by governing bodies of Public service pension schemes. Under section 249B of the Pensions Act 2004,AD5 scheme managers of public service pension schemesAD6 are required to establish and operate internal controls which are adequate for the purpose of securing that the scheme is administered and managed in accordance with the scheme rules,AD7 and with the requirements of the law.

Every governing body should have some of the following measures in place, although these measures will vary depending on the nature of the scheme and the legal obligations to which it is subject.

Planning and preparation

  • Maintain sufficient knowledge and understanding of administration. See Working knowledge of pensions.
  • Understand the scope of administrator responsibilities and tasks, as well as the suitability of those performing them.
  • Where necessary, have access to appropriate advice and assistance to negotiate contractual terms.
  • Consider both quality as well as value for members when selecting an administrator, see also Managing advisers and service providers.
  • Include administration as a regular agenda item at governing body meetings.
  • Ensure administration and record-keeping are key features of the risk register. Learn more in Identifying and assessing risks.
  • Develop a strategy for the long-term administrative objectives of the scheme.
  • Ensure monitoring of administration processes is used to drive necessary improvements.

Maintaining proper administration

  • Regularly receive appropriate information and reports from administrators and be able to challenge them when appropriate.
  • Ensure that all tasks delegated to an administrator are being carried out properly.
  • Regularly monitor the performance of administrators. See Managing advisers and service providers.
  • Manage issues with administrator performance and consider utilising any contractual terms to drive improvements.
  • Have procedures in place to enable a continuous and consistent service in the event of a change of administrator personnel, or administration provider.
  • Record the procedures to follow when administering the scheme, and how to maintain those procedures.
  • Ensure that administrators have an adequate business continuity plan that is reviewed at least annually and tested as appropriate. See Continuity planning.

Legal references

AD1Occupational Pensions Schemes (Scheme Administration) Regulations (Northern Ireland) 1997

AD2Articles 226A of The Pensions (Northern Ireland) Order 2005

AD3Section 249A(3) of the Pensions Act 2004
[Article 226A (3) of The Pensions (Northern Ireland) Order 2005]

AD4Public Service Pensions (Record Keeping and Miscellaneous Amendments) Regulations (Northern Ireland) 2014

AD5Articles 226B of The Pensions (Northern Ireland) Order 2005

AD6As defined in section 318(1) of the Pensions Act 2004
[Article 2(2) of The Pensions (Northern Ireland) Order 2005]

AD7As defined in Section 318(2) of the Pensions Act 2004
[Article 2(3) of The Pensions (Northern Ireland) Order 2005]