July 8, 2020
Robert Wakefield, Head of Pensions Administration, sees his appointment as Chair of PASA’s exit agreement working group as an opportunity to make additional improvements to the scheme administration transfer process.
Transferring from one scheme administrator to another is a known problem in the pensions industry. Unexpected exit fees can undermine some of the benefits of switching providers. And delays, which are common, make it hard for trustees to plan and can damage relations with scheme members.
I’m proud to be chairing a new working group, set up by the Pensions Administration Standards Association (PASA) to address these problems. The Exit Agreement Working Group is setting up a recommended exit agreement for trust-based pensions administration contracts across the pensions industry.
While not mandatory for providers, the exit agreement will act as a template for trustees to use as part of selection procedures and contract negotiations. We’d like to think that in time all providers will comply.
Improving administration transfers – PASA’s long-standing commitment
PASA has a strong track record in driving up standards in this area, aiming to make providers more helpful, fees more reasonable, and the overall process easier. All its corporate members have to sign up to PASA’s Code of Conduct on Administration Provider Transfers.
First Actuarial and scheme transfer improvements
As a successful firm continuing to win considerable new administration business, we have everything to gain from improvements in administration transfer. What’s more, we believe that everyone in the industry stands to benefit. That’s why we’re delighted to be playing a central role in the PASA working group.
In my day-to-day work running First Actuarial’s Administration function, I make sure all schemes get the care and attention they need. Many schemes switch providers to give their members the best possible service. But all too often, they are hit hard with unexpected additional costs, delays and uncertainties at the transfer stage. I’m particularly concerned that large additional costs like this can have a disproportionate impact on smaller schemes.
What the working group aims to achieve
Every member of the working group shares a commitment to bringing about positive behavioural changes when one firm is handing over administration responsibilities to another. The trustee has to come first, even when one firm is exiting the relationship, and there are far too many unwelcome surprises at present.
A more helpful culture will benefit the trustees and the firms themselves. After all, who knows who will be working with whom in the future? We see this as a win-win for the pensions industry as a whole as we all face the challenges that lie ahead.