Pension admin under sharper regulatory scrutiny

Pension scheme administration is receiving increased regulatory attention as The Pensions Regulator (TPR) clarifies its expectations for how schemes are governed, operated and overseen. Recent guidance reinforces the position that administration should be treated as a core element of effective scheme governance, rather than a purely operational function.

For trustees and scheme managers, this guidance places renewed emphasis on how administration risks are identified, managed and evidenced in practice, particularly where historic data, legacy systems and long-standing administrative practices continue to influence member outcomes. Although the guidance is directed at trustees and governing bodies, weaknesses in administration can also have direct consequences for sponsoring employers.

What has changed?

In December 2025, TPR published guidance for the governing bodies of all pension schemes, focusing on the effective administration of pension schemes in line with scheme rules, legislative requirements and regulatory expectations.

While the guidance does not introduce new legal obligations, it reflects increased regulatory focus on the risks that can arise from weaknesses in administration. In particular, TPR highlights the challenges created by historic data, complex benefit structures, legacy systems and long-standing administrative practices, which may continue to affect member outcomes if they are not subject to appropriate oversight.

The guidance has been issued against a backdrop of ongoing change across the pensions landscape. De-risking activity, insurer engagement, administrator transitions, and increased reliance on digital systems and automation are all placing additional demands on administration processes and controls. This increases the likelihood that historic issues will come under close scrutiny, and issues that have remained dormant for years can crystallise into significant costs for scheme sponsors and require a substantial resource investment to rectify.

What does TPR expect from trustees?

TPR’s guidance makes it clear that trustees are expected to take an active and informed role in overseeing pension scheme administration. While day-to-day activities may be delegated to third-party providers, responsibility for ensuring that administration is effective, accurate and well controlled remains with the governing body.

The guidance emphasises the importance of trustees having a clear understanding of how administration supports the scheme’s objectives, and how administration-related risks are identified and managed. This includes ensuring that governance arrangements provide appropriate visibility over performance, issues and emerging risks, rather than relying solely on contractual assurances or service level metrics.

Trustees are expected to demonstrate effective oversight across several key areas, as outlined below. 

Governance and oversight

Trustees should maintain a clear administration strategy aligned to the scheme’s objectives and risk profile. This includes establishing appropriate governance frameworks, ensuring regular and meaningful reporting to trustee boards, and maintaining clarity over roles, responsibilities and escalation routes. Engagement with administrators should form part of ongoing governance activity, rather than being limited to periodic reviews or issue-driven discussions.

Systems, controls and resilience

TPR highlights the need for trustees to have confidence in the systems used to administer their schemes. This includes assurance over data integrity, the use of automation where appropriate, and the resilience of systems and processes. Trustees should understand how risks relating to system failure, cyber security and data loss are mitigated, including the existence and testing of disaster recovery and business continuity arrangements.

Oversight of core administrative activities

The guidance draws attention to a range of core activities that require ongoing oversight, including member communications, contribution monitoring, transfers, benefit calculations and benefit payments. Trustees are expected to understand how controls operate across these processes, how errors are identified and corrected, and how risks such as fraud or pension scams are managed in practice.

Record-keeping, risk management and quality assurance

Effective administration relies on accurate and complete records. TPR expects trustees to ensure that key documents, member data and financial records are retained appropriately, and that administration risks are identified, assessed and reflected within scheme risk registers and wider control frameworks. Regular monitoring and benchmarking of administrator performance is also encouraged, alongside challenge and remediation (where performance falls below expectations). 

Taken together, these expectations reinforce the need for trustees to have a clear line of sight across administration arrangements, supported by proportionate assurance and governance.

Where administration arrangements are often tested

Administration issues are often identified during periods of change rather than through routine monitoring. While regular reporting may indicate that day-to-day service levels are being met, underlying issues can remain undetected until administration processes are tested more fully.

Changes in administrator or administration platforms are a common trigger. Data migration exercises often require historic data to be reviewed, cleansed or reinterpreted, which can expose gaps in records, inconsistencies in benefit data or differences in how scheme rules have been applied over time. These issues may not have been visible within existing reporting arrangements.

Corporate transactions can also bring administration risks to the fore. Pensions due diligence undertaken as part of a transaction typically seeks to identify whether historic administration practices could give rise to unexpected costs, delays or member detriment. Where documentation is incomplete or benefit calculations have not been subject to recent review, remediation activity may be required.

Insurer engagement is another point at which administration arrangements are subject to increased scrutiny. Insurers generally require a high level of confidence in data quality, benefit accuracy and governance controls. Issues identified late in the process can affect insurer pricing, extend transaction timelines or limit the options available to schemes and their sponsors. 

Beyond these event-driven triggers, schemes are also facing increased regulatory scrutiny through upcoming requirements. Most schemes are required to complete their first own risk assessment under TPR’s general single code of practice by spring 2026. In parallel, preparations for connection to the pensions dashboards programme are placing additional emphasis on data quality, governance arrangements and operational readiness.

What trustees, scheme managers and sponsors should be consider

In light of TPR’s guidance and wider regulatory developments, trustees may wish to consider whether their current approach to administration oversight provides sufficient visibility over key risks. 

This may include reviewing how administration risks are identified and documented, how issues are escalated and addressed, and whether existing reporting provides meaningful assurance beyond operational performance measures. Particular consideration may be needed where schemes rely on historic data, complex benefit structures or long-standing administrative practices that have not been subject to recent review.  

Where administration weaknesses are not identified early, they can become more difficult and costly to address at later stages. Issues may only emerge during insurer engagement, corporate transactions or regulatory submissions, potentially affecting timelines, increasing remediation activity or limiting available options. 

As schemes prepare for milestones such as own risk assessments and pensions dashboards connection, trustees are increasingly expected to demonstrate a clear line of sight between administration activity, scheme risks and governance oversight. 

The guidance underscores the role of pension scheme administrators as a core element of governance. For trustees, this places greater emphasis on maintaining clear oversight of administration arrangements and the risks associated with them. Sponsors may also wish to consider whether they have sufficient visibility and understanding of administration risks that could affect funding, transactions or longer term strategic plans for the scheme. 

In practice, addressing these risks often requires a focused review of administration arrangements, looking beyond routine service reporting to assess data integrity, benefit calculation and payment accuracy, governance controls and operational resilience. Such reviews can be particularly valuable ahead of corporate transactions, insurer engagement or key regulatory milestones, where confidence in administration becomes critical. 

For more information on the issues discussed in this article, including pension scheme administration and regulatory expectations, contact Zoe O’Donnell.