GMP reconciliation still tops the list as one of the biggest pension scheme administration challenges for the upcoming year, according to Aon Hewitt.

A report by the firm noted that in 2015, GMP reconciliations was the biggest administration issue for pension schemes by a significant margin, with 22 per cent of schemes citing it as their main priority.

However, Aon Hewitt warned that the process is not yet over, as HMRC will write to all scheme members in December 2018 for whom they hold details of a GMP liability advising them of the amount, payment date and scheme responsible for payment.

Therefore, schemes need to look at their GMPs in payment, as well as their deferred and active members’ GMPs, and reconcile them to ensure they are paying the correct amounts. Aon Hewitt warned that schemes should not underestimate the amount of preparation work needed before they can carry out reconciliation, and highlighted how important it is to have accurate data.

If schemes have not already completed GMP reconciliations, they should make it a priority, and cleaning up data is a vital first step.

In addition, other administration challenges that made the top ten for schemes in the coming year are responding to Freedom and Choice, meeting Standards of Recommended Practice (SORP) for pension scheme accounting, ensuring administration supports de-risking and ensuring the quality of scheme data.

Others include, getting communications right, keeping to budget, ensuring quality of service, having the delivery model you need and getting the right offering from your provider.

Commenting on the report, Aon Hewitt UK outsourcing commercial director Stephen Ruse said: “There seems to be little let-up in the challenges confronting pension scheme administrators. In this publication we have tried to summarise what we believe to be the key issues they will be facing in the coming year – and, as ever, they are a mix of regulatory, financial and managerial challenges.

“While all schemes will have their own priorities, the issues we have identified demand careful thought and planning, so we hope this summary will help administrators focus their efforts and resources as we move towards 2017.”

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