Pawns no more
For many years, pension trustees have focused on investment strategy, funding and covenant strength, while administration has often been monitored through periodic reporting and service level statistics rather than treated as a core governance risk.Â
However, increasing regulatory focus, will make this increasingly difficult to sustain. The Pensions Regulator’s (TPR) recent review of pension scheme administration highlights a clear shift for trustee boards: administration should no longer be treated as a back-office function, but a core area of regulatory accountability, governance and scheme risk.
The review also identified ongoing challenges around data quality, technology and operational resilience, and stressed trustees remain accountable for the standard of administration. Alongside this, preparations for pensions dashboards are increasing scrutiny of scheme data and the robustness of administration processes.
Moving up the agenda
Several factors are driving this change. First, the industry is undergoing significant regulatory change. Pensions dashboards, the Value for Money Framework, small pots consolidation and new approaches to retirement outcomes all rely on accurate data and efficient administration. Without strong foundations, schemes will struggle to meet these requirements and deliver the outcomes regulators expect.
Second, member expectations are evolving. Savers increasingly benchmark their pension experience against the digital services they receive from banks and insurers. Delays, poor communication and inaccurate information are becoming more obvious and less acceptable.
Third, many schemes continue to grapple with legacy systems, fragmented processes and historic underinvestment in administration infrastructure. As expectations rise, weaknesses in administration are becoming more visible and potentially more damaging.
A more strategic approach
The good news: trustees don’t need to overhaul governance structures to improve oversight. However, they do need a deeper understanding of how administration is delivered and whether it is fit for the future, which they can do by asking three key questions:
1
What do we have? Before assessing performance, trustees need a clear view of the current operating model. This goes beyond service reports. They need to understand how member data and money flow through systems, where manual interventions occur, where key controls sit, and where operational risks may arise.
Many schemes have operated under the same arrangements for years, making it easy to assume everything is working as intended. However, reviewing the operating model often reveals risks and inefficiencies.
2
How is it performing? Traditional reporting remains important, but trustees need to consider whether it genuinely reflects administration quality. Too often, oversight is driven by service levels, processing times and operational metrics. While useful, these do not always provide a complete picture.
Is administration delivering good member outcomes? Are comms effective? Do controls work as intended? Are risks being identified early enough? Effective oversight depends on meaningful management information, supported by narrative and context, not just data tables.
3
When will it need to change? Administration governance has historically been backward-looking, focused on reviewing performance and resolving issues after they arise.
Trustee boards need to adopt a forward-looking lens, considering regulatory change, shifting member expectations, technological developments and evolving service models; but also recognising the pace of change in the pensions landscape can challenge even medium-term assumptions.
Trustees should regularly test whether arrangements will remain fit for purpose over the next three, five or even ten years. This is not simply about incremental improvement, but whether the model is sustainable for a long period of change.
A key part of this forward view is operational resilience. Trustees should be asking what could realistically go wrong, from cyber incidents and system outages, to supplier failure or spikes in member demand, and how robustly the administration function would respond, including whether contingency plans are properly tested and would protect service continuity and member outcomes.
This scenario-based approach helps trustees identify risks and vulnerabilities early, rather than just reacting to events.
It’s always the data
Data quality underpins member communications, retirement calculations, dashboards readiness and risk management. Yet many schemes still treat data improvement as a one-off exercise, often left until a regulatory deadline or major change forces action. Poor data becomes more costly and harder to fix over time. Trustees should therefore treat data quality as an ongoing strategic priority embedded within administration governance, not a standalone project.
A stronger partnership
Stronger oversight also depends on closer collaboration between trustees and administrators. Too often, discussions are shaped by different priorities, with trustees focused on outcomes and performance, and administrators focused on systems and operational constraints. Both perspectives are valid, but effective governance depends on alignment around shared objectives, risks and priorities. The strongest models are built on transparency, partnership and forward-looking dialogue, not just retrospective reviews.
Time for a mindset shift
Administration has always been important; what’s changing is the level of attention it now requires. As regulatory expectations rise and member needs evolve, trustees must move beyond administration as a routine operational function. It should instead be recognised as a core component of scheme governance and a key driver of member outcomes.
For members, the experience delivered by administrators is how the scheme, and all those who run or govern it, are perceived. In that sense, administration is not just operational delivery; it is central to how trust and confidence in the scheme are built. The most effective trustee boards will be those that understand what they have today, how it is performing, and when it will need to change. Those three questions may be simple, but they provide the foundation for a more strategic approach at a time when administration can no longer be treated as a back-office concern.Â
For more information on any of the above, please get in contact with its author Jess Rigby.
Please note this article was originally published in Governance + Compliance magazine.
