Data from Law Debenture has shown a disconnect in how UK pension schemes oversee administration, with many trustees taking a reactive approach despite heightened regulatory scrutiny and evolving member expectations.
The study, which surveyed trustees from 119 UK pension schemes across both defined benefit and defined contribution schemes, found that while 38 per cent of schemes are actively planning or considering an administration review or replacement, a significant majority remain stagnant, potentially increasing risks around member outcomes and regulatory compliance.
The findings follow The Pensions Regulator’s updated guidance issued in December last year, which reinforced that trustees remain legally responsible for administration quality, even when outsourced.
According to the data, 38 per cent of schemes are taking action, 16 per cent are benchmarking, and 14 per cent are conducting service reviews, while 8 per cent are actively looking to replace their provider. Of those seeking a new provider, 80 per cent cite poor service – particularly in project delivery – as the primary driver. In addition, 62 per cent of schemes also have no plans to review or benchmark their administration.
Sankar Mahalingham, head of pensions growth at Law Debenture, says: “Member expectations have been fundamentally reshaped by the digital world. Accustomed to frictionless service in banking and retail, members now apply those same standards to their retirement. When administration falls short through poor communication, data errors or slow processing, the impact is often felt during the most emotionally and financially significant moments of a members life.”
Of the schemes not planning a review, 37 per cent cited their endgame focus as the reason. According to Law Debenture, this could be a missed opportunity, a prioritising administration and data integrity ahead of a transition is proven to drive endgame efficiencies and secure better outcomes for members.
