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Effective oversight of your administrator is an early warning system for issues. It can help identify and mitigate risks and act as a means of checking back to promises made. It challenges the sustainability of your services and encourage continuous improvement.

A balanced approach to managing administration should focus on your objectives and regularly check that they are being met. It prevents you getting lost in the detail, but provides the comfort of robust oversight.

Being able to challenge, using market experience and expertise, is important in ensuring that your administrator is performing. This brings insights into market and peer group practices. It asks the right questions.

There are always issues in administration. It is risky and directly impacts the members. Experienced and expert input to operational, reputational and financial risk management can ensure that risks are identified and effective mitigations put in place.

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Case Studies

Comfort and Reassurance

We were invited to join our client's Administration Committee to provide independent input and expertise on administration during a period of heavy workload for the administrator, the pensions team and the Committee.

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Administration Expert on a Trustee Committee

We were invited to join the Administration Committee of a large pension scheme as independent administration expert during a very busy period covering several projects and strategic decisions. We joined as a full member in the same way that you often find investment experts appointed to investment committee. We stepped down when the extremal input was no longer necessary.

 Our client was having an especially busy period with their administration and were confronting a lot of strategic and implementation issues. They recognised the need for someone independent, with an outside and fresh perspective, that could challenge their administrator, in house executive team and consultants, but just as importantly could support the Committee in discussing the decisions and challenges they were facing.

Adding value

Our membership of the Committee covered a tough period: a market review, de-risking and data issues were just some of the projects going on at the time. We brought our market perspectives and client experience to the table to challenge the thinking and decision making process. We helped the client hold the administrator to account and asked challenging, probing questions.

Comfort and reassurance

Our appointment provided reassurance and comfort to the Committee, Trustee and pensions team. It provided that extra level of oversight, challenge and brought a pragmatic and fresh perspective some of the tricky issues that they were facing. It pushed their advisers and providers to be more transparent and helped to foster a collaborative approach to the delivery of administration and complex, strategic projects.

Key learnings

  • Independent expertise can help to challenge thinking and ensure that you are asking the right questions of your administrator.
  • Market insights can bring new perspectives and ideas to the table that may not otherwise have been discussed.
  • An independent administration expert can help speed up decision making, foresee risks and also provide input and market insights on matters where the Company and Trustee may have differing views. 

The Importance of Oversight

In administration, it is the larger errors and systemic issues that are of greater concern, but can often be more difficult to see when the trustee is viewing the service from a distance. This is what was happening to our client. 

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Setting the scene

Administration is complex. It may seem simple to the member on the receiving end, and to the clients that hold it at arm’s length. But think about the raft of legislation, data issues, legacy rules, mergers, acquisitions and all the other things that get thrown into the pot for good measure. It’s easy to see how mistakes can creep in and errors be made regardless of how robust the systems, risk management and quality controls are that wrap around it.

So, in our view we tend to see minor errors as manageable and inevitable. However, it is the larger errors and systemic issues in an operation that are of greater concern, but can often be more difficult to see when the trustee is viewing the service from a distance, and assuming the administrator is on top of things.

This is what was happening to our client. They had a number of quality issues with their administrator and complaints were on the increase. We were appointed to take a more detailed look at the administration operation and get to grips with what was causing the problems.

Investigating the administration

We spoke with the client to build an understanding of the issues, and to get their perspectives. Most importantly, we asked about how they manage the relationship. We followed this up with a visit to the administrator to hear the other side of the story.

It is important in any relationship to accept that there are always two sides to any story. The administration operation was not set-up to deliver an effective and quality service, but neither had the client really got to grips with what was happening at the administrator. The trustee had never visited the office, never met the team and relied largely on the quarterly reporting. For all intents and purposes the administrator was left to their own devices, and unchallenged.

Our recommendation to the client was two-fold: firstly, spend some time with your administrator to think about what is wrong, why it is wrong and how to fix it. Then turn that into a plan and work together to transform the services. Secondly, take a moment to reflect as a trustee board on the role you play in the oversight of the administration and whether there are things you could be doing better.

Prevention better than cure

Casework errors and SLA delays should be reported as a matter of course in any decent stewardship report. But more fundamental issues in the service, such as resourcing issues or an incorrect or out of date knowledge base are much harder for a client to see. The administrator may not necessarily know either, and even where they do may be tempted to rely on the experience and knowledge of the individuals rather than distract them from BAU.

Oversight of your administrator is, therefore, important in ensuring the operation is effective and delivering a quality service. It also helps to build and foster constructive, collaborative relationships and ensures that both parties know what is going on, when and how it impacts the service.

Of course, there is a resource overhead in dedicating the appropriate amount of time to your administrator and many trustees may simply not have that available to them. This is where external support can play a part, and is something that our client looked into following our recommendations.

Key learnings

  • Administration is complex and errors are unavoidable, but there is more to a quality administration service than just right-first-time statistics and complaint volumes.
  • It is important to build a governance and oversight framework around the service. This needs to be pragmatic, appropriate and manageable based on your resourcing availability. External support can be deployed to help fill the gaps.
  • Fostering close relationships has softer benefits, such as collaboration, cooperation and a mutual understanding between each party.

What our Clients Say

"Muse continue to provide excellent independent support to us and their clients. Their operating model provides a refreshing change: quality, independently minded people who are good at what they do. Muse know where they want to operate and continually seek to take new ideas into those areas. Muse continue to punch above their weight."

Andy Rowell, Head of Trustee Services,
Unilever

"Muse bring a helpful and experienced objectivity to projects which helps guide the Trustee Board through some important decision making with pace."

Lynn Collins, Former Head of Marks and Spencer Pension Trust,
Marks & Spencer Pension Trust Limited

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