How we helped our client by carrying out an audit of key administration processes and updating them where necessary.
The background
A client was in a period of transition and wished to carry out a review of their pension administration function to understand training needs, deliver targeted training and also opportunities to introduce efficiencies and best-in-class practices.
Our solution
We undertook
- a review of their internal pension processes and procedures manual
- a “think-in” session with the administration team to understand areas of risk/pressure points
- a high level review of the member data to ensure consistent, reliable and accurate data
- a review of document templates (i.e. benefit calculation templates, letter templates and benefit statements) and check that they comply with statutory requirements (i.e. leavers, joiners, etc.)
- review processes for liaising with HR and Payroll to ensure the timely transfer of information
- ensure processes are in place for unusual cases that will have an influence on benefit calculations (e.g. change in working hours, purchasing of service, salary averaging)
We identified areas where:
- the mechanics of the calculations of pensions at retirement were incorrect, and benefits were therefore being materially overstated or understated
- inconsistencies and a lack of clarity in the way that pension scheme rules were being calculated and applied, and
- processes associated with the pension scheme were operated by a single person at the client, with consequent significant key person risk
The results
We then worked with the client and their pension administrators in order to rectify the issues we had identified.
As a result the correct benefits were paid to members going forward, calculated on a transparent and consistent basis; and processes were better documented, and restructured, reducing the key person risk.
