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Planning and maintaining administration

General code in force: 28 March 2024

  1. The fundamental duty of a governing body is to administer its scheme in line with rules and the law. Good administration is central to the responsibilities of the governing body and is essential to complying with the law and this code. Any scheme depends on the timely and accurate processing of multiple strands of administration. 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.
  2. Regulations1 set out the records that governing bodies of trust-based pension schemes must maintain. The Public Service Pensions (Record Keeping and Miscellaneous Amendments) Regulations 20142 sets out the records that governing bodies of public service pension schemes must maintain.
  3. Every scheme must operate internal controls which should include administration.
  4. Whether administered in-house or by a third party, every governing body should have the measures listed below in place. It should take steps to ensure that its scheme is being properly administered. The complexity and level of detail of these measures will vary depending on the nature of the scheme and the legal duties it is subject to.
  5. With regard to planning and preparation, governing bodies should:
    1. maintain sufficient knowledge and understanding of administration (see Knowledge and understanding)
    2. understand the scope of administrator responsibilities and tasks, as well as the suitability of those performing them
    3. where necessary, have access to appropriate advice and assistance to negotiate contractual terms
    4. consider quality as well as value for members when selecting an administrator, see also Managing advisers and service providers
    5. include administration as an agenda item at governing body meetings
    6. ensure that administration and record keeping are important points on the risk register (see Identifying, evaluating, and recording risks)
    7. develop a strategy for the long-term administrative objectives of the scheme and agree a process for delivering these with the administrator)
    8. monitor administration processes to drive necessary improvements.
  6. To maintain proper administration, governing bodies should:
    1. receive appropriate information and reports from administrators, and be able to challenge them when needed
    2. ensure that all tasks delegated to an administrator are being carried out properly, according to the law and scheme governing documents
    3. regularly monitor the performance of administrators (see Managing advisers and service providers)
    4. constructively manage issues with administrator performance and consider using any contractual terms to drive improvements
    5. have procedures in place to enable a continuous and consistent service in the event of a change of administrator personnel, or administration provider
    6. record the procedures to follow when administering the scheme, and how to maintain those procedures
    7. ensure that administrators have an adequate business continuity plan that is reviewed at least annually and tested as appropriate (see Scheme continuity planning)

Legal references

1See Chapter 3 of Part 3 of the Occupational Pension Schemes (Scheme Administration) Regulations 1996 [See Chapter 3 of Part 3 of Occupational Pensions Schemes (Scheme Administration) Regulations (Northern Ireland) 1997

2Public Service Pensions (Record Keeping and Miscellaneous Amendments) Regulations (Northern Ireland) 2014