Administration

This is the second year the Scheme Annual Report has featured a dedicated section to pension administration. In March 2024, updated guidance for preparing the fund annual report was published on the Board’s guidance page.  

The new guidance applied to fund annual reports from 2023/2024 onwards with compliance in the first year on a ‘best endeavours’ basis. Funds could exercise judgement on the application of this principle in instances where changes to the content would require disproportionate effort or cost. As this is the second year in which the new guidance has been in effect, full compliance is expected.

Annex A of that guidance sets out the administration key performance indicators (KPIs) which funds are required to report against in their annual report. They are also required to provide an appropriate commentary so that readers can understand and put the data reported into context. Compliance with the guidance has been assessed as part of the Scheme Annual Report data‑collection exercise, and a summary of the findings is set out in the governance section.

The Board will continue to develop its approach to reporting this data in future years, with a view to produce scheme-level aggregated KPI information, as well as a means for viewing the dataset in a dashboard format to allow comparison of individual fund performance.

A suggested approach will be shared with funds and feedback from administrators will be key to ensure any scheme-level aggregation is meaningful and helpful.

Scheme level administrative cost data

The continued increase in administration costs shown above, around £30 million since the previous year, was expected and as was noted last year is due to long term cost pressures such aswas expected due to:

• Increasing complexity in the Scheme
• Implementation of the McCloud Remedy
• Pensions Dashboard preparation
• Increased expectations around member communications and digital services
• Increased need for cybersecurity protection
• Pressures recruiting and retaining a skilled workforce

Other administrative data reported

Fund annual reports also included the following information:

• All funds reported on member and employer numbers
• All funds reported on activities by administration function
• Eighty (92 per cent) of pension funds reported the actions taken on their Communication Policy
• Fifty-nine funds included a value for money statement

Value for money statements

Forty-seven funds reported administration value for money cost per member, these costs can be seen in the administration value for money graph. The average cost reported by these forty-seven funds was £37.63 and ranged from minimum of £15.47 to maximum of £128.80*.

* the £128.80 fund (Southwark) included this context: Administration costs for 2024/2025 have increased due to an ongoing investment in technology, which also includes significant upgrades and costs linked to the McCloud discrimination remedy and UK National Dashboards Programme

While most funds have retained an in-house administrative function, 34 of them use external providers or shared service arrangements.

Internal Dispute Resolution Procedures

Sixty  funds reported the amount of new internal dispute resolution procedure (IDRP)  cases they had received during the year in their annual reports. The average number was 6 and ranged from 0 to 39. Thirty-nine  funds reported the amount of new formal complaints they had received during the year in their annual reports. The average number was 89 and ranged from 0 to 1182.

Fifty-three funds did not mention data improvement plans in their annual report.

Funds must review their member data at least once a year and calculate data quality scores for common data and scheme‑specific (key) data and report these to The Pensions Regulator in the Scheme Return. If data issues are identified, the fund must have a data improvement plan that sets out actions to improve data quality; and regularly reviewed and updated.

• Chair’s Statement
• Highlights
• Governance and Training
• Financial Performance
• Membership
• Fund Accounts and Net Asset Statements
• Investments and Funding
• Administration
• Scheme Advisors
• Scheme Auditors