Trustees must wake up to administration risks that threaten their pension schemes or they could be facing regulatory problems, warns Independent Transition Management (ITM).

The data, administration consulting and IT support provider said risk is often dismissed as relating to investment decisions and to funding, but poor administration is an aspect that deserves time spent.

"Pensions administration is a high risk scheme management activity and must be treated as such," explained Phillip Bretnall, director at ITM. "Making sure members are receiving the right benefits at the right time is a major concern for trustees and, if not executed well, trustees, schemes and sponsoring employers can face major reputational damage - notwithstanding the potential financial implications."

Bretnall reiterated that pensions administration and data are regularly seen as the 'poor relation' when it comes to scheme management.

"We expect much closer scrutiny to this activity from the Pensions Regulator as he digests the industry comment on the 'internal controls' and 'record-keeping' consultation. Trustees and scheme managers need to start acting now. Many don't even know if their administration processes have been, or will be, outsourced offshore and what/if any will remain in the UK. This level of 'knowledge' will not be acceptable going forward," he concluded.

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