Admin 2030: What will pensions administration look like in the future?

Predicting how we will be living and working in the future is notoriously difficult – sci fi predictions are often overly-optimistic. We’re not commuting to work in flying cars as Blade Runner and Back to the Future II predicted!  

However, The Pensions Regulator’s revised administration guidance points to several areas where they expect administration to be strengthened, and we agree that focusing on these will help turn pensions administration from the back-office function it’s previously been perceived as, to a vital component of a scheme’s success.  

So, inspired by the Regulator’s revised guidance, here are my – arguably optimistic - predictions for what pensions administration might look like by 2030… 

Technology  

It’s an exciting time when it comes to technological innovation and development. Pensions Dashboards in particular are going to revolutionise how deferred and active members interact with their pensions – by 2030 benefit information will be fully automated and available in real time. Members will expect interactive tools and personalised content as standard, and as dashboards integrate with open banking, members will also be able to see their pension alongside their current account and savings. 

Trustees and sponsors will also expect to have real time information at their fingertips. Improved governance will require a transparent, fast and holistic view of what’s going on under the bonnet of their scheme. Tools like LCP’s Visualise+, which combine funding, investment, administration and covenant information will become the norm.  

Let’s not forget the powerful impact AI is likely to have on improving member communications and internal processing. Being able to more easily provide communications in a format members prefer – or need – will lead to greater engagement and improve their overall experience. AI will be increasingly used to spot scams, and to onboard clients more quickly – using a scheme’s Trust Deed and Rules, administration manual and data to shorten the process significantly. And using AI to carry out standard processes like logging post and assigning work will free up administrators’ time to spend on the cases where their experience adds real value. 

Investing in technology and digital tools will be a strategic priority for pensions administrators, helping schemes deliver better governance, efficiency, and member engagement by 2030.

Data 

The drive for improved data will continue, with the value of data more widely recognised. Pensions dashboards will have helped highlight the perils of data degradation, and while many schemes are choosing to run on, de-risking exercises will still be widely used by schemes looking to manage their liabilities – necessitating clean data.  

There will be new ways of maintaining clean data, including the use of data held by credit reference agencies, and a national database enabling ID cards. Notwithstanding how useful National Insurance numbers have been, by 2030 we will have a truly unique identifier for all our members! 

Cyber 

There have been several high-profile cyber incidents in recent years, and the Regulator’s guidance highlights how trustees and administrators should be guarding against cyber attacks, and how important it is to manage risks and plan for incidents.   

By 2030 a significant number of schemes will have had their cyber response plans put to the test. Incident scenario planning will be on trustees’ agendas more regularly as they recognise it’s a case of ‘when not if’ an attack targets their scheme. 

Trustees who have practised their incident response and planned for the unexpected will be able to respond to incidents more quickly. There are several steps that administrators will need to have taken trustees through to make sure they are prepared for an attack, including: training, assessing the risk for their scheme, making sure controls are in place and incident scenario planning.   

People 

First class administration requires first class people to deliver it. Recruiting and retaining administrators is a known challenge, and by 2030 pensions administration providers and the wider industry will have implemented new initiatives to help highlight the wide range of roles and career progression within pensions administration. 

While automation is reducing the need for administrators to carry out calculations on a daily basis, there are other skills that will become more important over time. By 2030 the majority of defined benefit members will be pensioners – administrators will therefore need to be able to support vulnerable members with confidence. Expertise in areas such as Power of Attorney appointments and other delegations, for example, will be a crucial requirement and will widen the skill set needed to be an administrator. Trustees need confidence that the people in their administration team care about the service they provide to scheme members. 

Professional qualifications will also evolve to cover new areas, including de-risking, ensuring administrators have the knowledge and expertise to meet future scheme requirements.