Trustees and administrators have been called on to work together to prevent member complaints, as research reveals that over half (54 per cent) of member complaints are rooted in issues with scheme administration or maladministration.

The survey, conducted by Sackers during a webinar, showed that nearly a quarter (23 per cent) had found that member complaints were related to transfers, while 11 per cent were due to overpayments, and 8 per cent to discretionary decisions.

Sackers litigation partner, James Bingham, noted that with The Pensions Ombudsman (TPO) frequently awarding compensation ranging from £500 to £2,000 for member complaints, and occasionally exceeding that in extreme cases, “it is in the interests of trustees and administrators to take a proactive stance in their dealings with members”.

He also acknowledged that often it is unclear who should pay compensation – administrator or trustee – suggesting that using policies and agreements between the two can help resolve such matters promptly.

He stated that where both parties are respondents to a complaint before TPO, the decision is sometimes left to the parties to resolve, adding complexity, delay, and further fuelling member dissatisfaction, which is where a “joined-up approach” between trustees and administrators can help to avoid this.

“The message is clear: a well-timed conversation and early communication could prevent a formal complaint later, which is in everyone’s interests,” he said.

“Good communication can help members feel heard, even when the outcome isn’t what they hoped for.”

Sackers senior associate, Amy Difford, echoed this view, stating that most member complaints arise from feeling ignored, poorly informed and having to chase for updates, not from financial harm or loss.

In fact, she suggested that, in many cases, members escalate concerns “simply because they don’t know what else to do”.

Difford explained that a significant proportion of those complaints could be prevented altogether through better communication and expectation management.

She highlighted that major projects such as dashboards and guaranteed minimum pension (GMP) equalisation, along with growing member expectations regarding service, have placed administrators and trustees under "huge pressure".

Therefore, she stressed that trustees who recognise the importance of the frontline services administrators provide and who work closely with them early in the process can reduce risk and save time, cost, and stress for all involved.

In particular, Difford highlighted some steps that she believes are “simple but effective” that trustees can take to reduce the risk of complaints escalating.

“First and foremost, focus on clarity, make sure communications are easy to understand and avoid technical jargon, but importantly, answer the questions that members ask," she said.

“Engage early with members; don’t wait for something to go wrong before opening the lines of communication.

“Be selective in what you send: overwhelming members with multiple or poorly timed messages can lead to confusion rather than clarity, however well intentioned.”

She also emphasised the importance of “choosing the right channels” for a scheme’s audience as she indicated that in many cases, a well-timed email or SMS will be more effective than a letter.

Difford also pointed out that it is a “good idea” to signpost to trusted sources, such as regulated financial advice or the scheme’s standard literature, so that members know where to go for further support.

Additionally, she emphasised the importance of maintaining good records, stating that having a clear audit trail of communications, detailing what was communicated and when, is "essential" for quickly resolving issues and defending a scheme's position in the event of a complaint.

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