Cooperation between trustees and admins key to continued pension payments

Trustees must work closely with administrators to ensure pension payments continue during the COVID-19 pandemic, according to Dalriada Trustees professional trustee, Judith Fish.

In a blog post, Fish called for trustees to communicate with administrators about how they can pay members’ benefits and keep member data secure while staff are working remotely.

“For those firms administering our pension schemes, the current period of uncertainty brings new challenges and stretches the business continuity plans of all organisations. Administration firms will have to deal with the majority of their staff home working and ensure they have coverage if key members of staff fall ill,” said Fish.

She also recommended the examination of administrators’ business continuity plans, wider administration processes and the April pension increase exercise.

Fish commented: “Many pensioners will expect to receive written confirmation of their new pension and P60s for the tax year. Are there any other bulk exercises coming up, such as a valuation extract or the trustee report and accounts that you need to plan for? You also need to consider how you are going to communicate with your members.

“Most members still use traditional methods of communication, which means physical correspondence to and from administrators by post. How will the administrators deal with member queries?”

Regarding disinvestments, Fish recommended that trustees understand what concessions investment managers can make regarding signatures, while she also suggests holding more cash than usual so that several months-worth of pension payments can be accounted for.

Trustees should also be aware of the challenges faced by scheme actuaries and auditors, according to Fish, and must find out if their services can continue to be provided in a timely manner via remote means.

Finally, Fish insisted that trustees examine how their own effectiveness might be hampered by examining business continuity plans, remote working capabilities and documentation limitations.

Decision-making processes and signing policies might also have to be reviewed in order to ensure schemes can continue running smoothly if some trustees are unavailable due to poor health.

“We must be confident that even in these difficult times, pensions and other benefits will be paid on time. This is particularly key as our pensioners are likely to be some of the most vulnerable members of our society. Another key process is the payment of death benefits. This is an extremely sensitive time for the member’s family, so these benefits need to be dealt with in a timely and efficient manner,” said Fish.

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