The individual responsible for managing the day-to-day affairs and taking the strategic decisions involved with a group’s pension fund/plan is known as the Pension Plan Administrator. They ensure the money is being properly contributed to the fund or not and also look into the fact that all the payouts are promptly distributed among all qualified plan participants or beneficiaries.
Pension administration in the United States ensures that any organizational retirement plan does not discriminate against the lower level employees, while also ensuring that the plan is not used as an abusive tax shelter. For instance, yearly pension administration work involves filing a Form 5500 with the Internal Revenue Service.
Recent examples of pension plans are: Pension Protection Act of 2006 and EGTRRA.
The advancement of technology had a wide effect on this system. For example; John Hancock Insurance and QED Financial Systems , this system allows participants to access their account balances through a technology system and change their investment elections as they see fit.
The most commonly used division of a Pension Firm is the Third Party Administrator (TPA). It is an independent firm that does not sell associated investment products. Example; Pension Administration and Trust Accounting (PATA) in Ipswich, MA.
Several professional designations are available to those who perform this work and are offered by the National Institute of Pension Administrators and the American Society of Pension Professionals and Actuaries.
The Pension Plan Administrator with the help of the Management Committee or Human Resources Council performs the following functions:
- Exercises authority under the Pension Plan Rules, as required, including interpretation of the Plan Rules and setting terms and conditions where Plan Rules explicitly so require
- Approves the processes for approving changes to Pension Plan administrative procedures
- Reviews and recommends for approval by the Board of Directors:
- Changes to the pension governance structure
- The filing of actuarial valuations with regulatory authorities
- The levels of employer and employee contributions to the Pension Fund in accordance with the Pension Plan Rules
- Changes to pension benefits or plan design and amendments to the Pension Plan Rules
- Monitors compliance with the Pension Plan Rules and annually reports on compliance with Pension Plan regulatory filings
- Appoints the Pension Plan actuary.
Know more about Multi-Employer Pension Reform Act of 2014 (MPAA)
source: http://payrollservicesmi.blog.com/2015/02/24/the-key-functions-of-a-pension-plan-administrator/