Administering defined contribution

Administering defined contribution pension schemes

For further information go to our dedicated DC website

In theory, the allocation of contributions under a defined contribution scheme should be a straightforward activity. Contributions from the member and the sponsoring employer are invested in an investment account (generally with contribution buying units in a unitised investment fund).

However, experience shows that this is by no means as straightforward as it could be with individual scheme design creating the need for manual intervention from one month to the next, for example as a result of age related contributions or contribution matching.

Where errors are made, these can often be repeated over many months (or even years) and rectification can become an expensive and time consuming exercise. Trustees are obliged to correct underpayments but often find it difficult or impossible to address overpayments, especially where monies have already been paid.

In order to help avoid these errors, or at least trap them before they become systematic, we run a series of validation checks with each contribution cycle.
We believe that this approach is just common sense but so far as we know is unique to Quantum.

Accurate administration is just one example of how our common sense approach to defined contribution pension schemes can help members, trustees and the sponsoring employer to achieve the best outcomes.

For further information go to www.newquantumthinking.co.uk