The Pensions Administration Standards Association (PASA) has published a white paper on the digital administration of pension schemes.

PASA conducted a survey and industry interviews to understand the attitudes and progress being made toward digital administration, focused on what improvements there have been and what challenges are still faced by administrators.

The group said the research showed the penetration of digital admin was “patchy” and processes used to improve data varied “wildly” across the industry.

It added that digital processes are largely standalone, with low levels of automation.

This follows previous PASA research in 2021 which found digital admin efficiencies were appealing but many schemes were affected by poor quality data.

“While most schemes consider digital records to be very important, the level to which they’re prepared to implement them varies across the industry,” Pasa Digital Admin Working Group chair, Sian Jones, stated.

“Most schemes appear to be on the road to being compliant with the UK’s dashboards’ data requirements, and the new guidance on connection dates should allow time for schemes to catch up.”

PASA acknowledged that while many schemes consider digital admin important, some do not recognise the benefits or consider the potential benefits tangible.

It said that automation remained a goal and, in certain applications, a clear benefit, but it’s not a primary focus for all schemes, irrespective of size or whether they are defined benefit or defined contribution.

Adding to this, PASA Chair, Kim Gubler, said: “Ultimately, there’s a mismatch between what some schemes say is important and what they’re actually doing.

“Regulatory compliance trumps all other functions, including improvement of digital admin which would make compliance easier, cheaper and more meaningful. This is an anomaly the industry needs to address.”

The working group argued that it was clear good data is essential and bad data was not just an internal problem, it was the “enemy” of digital admin and perpetuates bad processes, creating more queries requiring manual intervention than would be necessary if the data was clean in the first place.

“Cost is still perceived as the greatest obstacle to improving data, but cost is only one aspect of what’s really a cultural problem,” Gubler added.

“The industry has spent decades driving down the price of admin in the name of efficiency.

“There’s little understanding about how spending money now, or on an ongoing basis will both reduce costs and improve engagement in the long term.

“This whitepaper explores where we are in 2024, how we got here and where we should go next in terms of automation and transformation of digital admin into the future.”

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