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

A pension plan administrator must ensure that the pension plan and pension fund are administered in accordance with the Pension Benefits Act (PBA) and regulations and the terms of the pension plan. They are ultimately accountable to all participants of the pension plan, including plan beneficiaries, sponsors and regulatory authorities.

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. The pension plan administrator’s responsibilities to beneficiaries include, but are not limited to:

  • Ensuring that certain plan information is available to those who are entitled to receive it and that the information is accurate and complete and provided within the timeframe specified in the PBA and regulations
  • Enrolling employees in the pension plan
  • Providing plan beneficiaries information about their rights and responsibilities in respect to the pension plan
  • Providing plan beneficiaries information and documents that are required to be disclosed
  • Determining plan beneficiaries’ entitlements
  • Making payments to plan beneficiaries when they are due.
  • Making payments to former spouses of plan beneficiaries with respect to their share of the plan beneficiaries’ pension benefits (in accordance with the PBA and regulations, and court documents that are filed with the administrator).
  • Responding to inquiries or complaints from plan beneficiaries.