What is Pension Plan Administrator
A pension plan administrator manages the day-to-day affairs and the strategic decisions involved with a group's pension fund/plan. More specifically, the plan administrator ensures that money is being contributed into the fund, the proper asset allocation decisions are made and that payouts are promptly distributed among all qualified plan participants or beneficiaries.
BREAKING DOWN Pension Plan Administrator
For smaller companies, and for simplicity and cost savings purposes, the employer may elect to be the company's pension plan administrator. However, as the number of employees grows, the task will often become more time consuming and complex and it is often more worthwhile for the employer to hire a professional to be the pension plan administrator.
In terms of fiduciary duty, the pension plan administrator has a duty to act in the interest of the plan's participants, not the underlying company.
Pension Plan Administrator Responsibilities
Pension plan administrators generally make sure pension funds adhere to pension plan mandates, while complying with Pension Benefits Act (PBA) bylaws. Administrators effectively serve all associated parties, including regulatory authorities, plan sponsors, and beneficiaries.
A pension plan administrator may delegate some or all of its responsibilities for administering the pension plan and administering and investing the pension fund to various service providers. The service providers may be insurance or trust companies, employees of the administrator or pension specialists who are hired to assume certain aspects of plan management and administration (e.g., actuaries, accountants, pension consultants, investment managers, fund custodians, brokers, etc.). These service providers, regardless if they are employees of the administrator or third parties, are subject to the same duty of care as the administrator.
A pension plan administrator's core tasks include:
- Enrolling employees in the pension plan
- Calculating a plan beneficiary's entitlements
- Making scheduled payments to beneficiaries
- Making sure all plan data is accurate and provided to participants in a manner consistent with PBA timetables.
- Paying pension benefits to the ex-spouses of plan beneficiaries, according to court rulings and PBA regulations
- Fielding beneficiary questions, concerns, and complaints