Ireland’s Roadstone Group pension scheme strongly believes in in-house administration as the best way to achieve efficiency and effectiveness in pensions management. Established in 1967, the scheme has around 2,000 members, of which about 1,000 are active and follows a defined benefit (DB) structure which is contributory and integrated with social security benefits. Due to the nature of the sponsoring companies – suppliers of materials to the construction industry – most scheme members are male blue collar workers.
With assets under management of approximately IR£200m (e254m), the scheme has made a case for in-house administration. Its pension department currently handles all the tasks related to benefit design and planning, record-keeping, benefit calculation, financial management and accounting, legislative and regulatory compliance and member service and communication. Although external actuarial, legal and investment advisers are used by the fund, the whole process involving both administration and investment management is co-ordinated and supervised internally.
To prove the efficiency of its internal administration team, run by only two people, the scheme concentrates on the four main constituents of the schemes: the companies within the group, the active members, the plan’s retirees and the trustees.
Regarding the pensions department’s relationship with the group’s companies, in addition to the usual day-to-day running of the scheme. The team advises employers on all pension matters including regulatory requirements and changes, comparisons with other schemes, actuarial valuation results, benefit and rule changes, individual and group entitlements and augmentation costs, and on the effects of rationalisations and acquisitions and all related matters.
On the active members side, all the efforts are focused on improving communication. The whole communication process is handled by the pensions department that deals with enrolment matters and queries, issuing benefit quotations and statements. The department also organises informative presentations and puts together annual reports. One of the most important tasks handled by the pensions team is everything related to members’ counselling, including information on voluntary contributions to the plan and transfers from previous schemes. At the same time, it deals with contribution deductions and collection and record maintenance.
The Roadstone pensions department also plays a major role among the scheme’s pensioners. Apart from managing the payroll system for pension payments and
dealing with enquiries, the team represents a specially relevant link between the group and its pensioners who allow them to remain being part of the organisation.
The four groups which the department looks after are the scheme’s trustees. Regarding this, the efforts are concentrated on ensuring the scheme’s compliance with the provisions of Pensions Act, Family Law Acts, trust law and revenue commissioners’ requirements, and with company law. The pensions department also carries out the elections for member directors and runs training courses for those elected.
Equally important is the team’s involvement in the investment management arena by monitoring investment strategies with weekly contacts with the external asset managers and actively managing their direct property and cash holding themselves. It also negotiates, with the help of solicitors, their management and custody arrangements. Although this might seem to be too much work for such a reduced team, this approach has proved to be successful. As an insider, the pensions department is able to understand all aspects of the culture and operations of the company at the same time that it’s aware of the scheme members’ backgrounds which facilitates communication and management.
The single focus of the people in charge of the scheme administration means that there is no competition from other clients for their time and no question of divided interests. This enables them to secure maximum advantage from their dealings with outside advisers such as investment managers.
The people involved know that this approach to in-house administration has been specifically designed for the special requirements of the group’s pension scheme, but they also believe that similar structures could apply to any scheme, regardless of its size. A reduced number of well informed and committed people has been able to provide best practice at a reasonable cost and this proves the efficiency of the Roadstone scheme administration department.
A few years ago, the group received a quotation from a firm of pension consultants for the administration of the of the group’s Irish and UK schemes. The quote, given on the basis of the consultants carrying out only two processes – record administration and benefit quotations – proved to be more expensive in the case of the Roadstone scheme, than the total cost involved in managing all processes. This has been seen as a incentive for the pensions team to continue doing their job and keep up-to-date of all the developments in this increasingly complex area.

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