Definition
A scheme administrator is the person or organization legally responsible for running a pension scheme on a day-to-day basis, including processing contributions, keeping records, and deciding who receives death benefits.
Understanding who your scheme administrator is matters crucially for estate planning because they control what happens to your pension when you die, not your executor or will.
What Does Scheme Administrator (Pension) Mean?
Under the Finance Act 2004, every pension scheme must have a scheme administrator responsible for the scheme's tax affairs and regulatory compliance. For the NHS Pension Scheme, the NHS Business Services Authority (NHSBSA) serves as scheme administrator. For workplace pensions, trustees typically fulfill this role. For personal pensions, your pension provider (insurance company) acts as scheme administrator. The scheme administrator must pass HMRC's "fit and proper person" test and meet specific residency requirements.
The scheme administrator's day-to-day responsibilities include registering the scheme with HMRC and The Pensions Regulator, processing member contributions and claiming tax relief, maintaining accurate records of all members, calculating retirement and death benefits, providing annual benefit statements, and answering member queries. When you complete a pension nomination form (expression of wish), it goes to your scheme administrator. When you die, they review your nomination and decide who receives your death benefits—usually following your wishes but not legally bound to do so.
Your pension death benefits don't pass through your will like other assets—the scheme administrator makes these decisions separately from your executor. This distinction matters significantly for estate planning. A pension nomination is an expression of wish, not a legally binding instruction like your will. The scheme administrator can override your nomination if circumstances changed since you completed it, such as divorce, death of a nominated beneficiary, or family situations that make your original nomination inappropriate. Death benefits paid at the scheme administrator's discretion typically don't form part of your estate for inheritance tax purposes, though pension tax rules apply depending on your age when you die.
The scheme administrator differs from pension trustees, although the roles sometimes overlap. Trustees are responsible for governing the pension scheme—making investment decisions, ensuring proper funding, and protecting members' interests. The scheme administrator handles day-to-day operations like processing contributions, keeping records, and paying benefits. In many occupational pension schemes, trustees also serve as scheme administrator, but these are legally distinct roles with different responsibilities.
Common Questions
"Who is the scheme administrator for the NHS Pension Scheme?" The NHS Business Services Authority (NHSBSA) is the scheme administrator for the NHS Pension Scheme. They handle all day-to-day administration including processing pension contributions, managing member records, calculating benefits, and making decisions about death benefit nominations. Contact them at nhsbsa.pensionsmember@nhsbsa.nhs.uk for pension queries.
"What happens if I don't complete a pension nomination form?" If you haven't completed a pension nomination form, the scheme administrator has discretion to decide who receives your pension death benefits. They will typically consider your dependants and may contact family members, but having no nomination means you lose control over who benefits from your pension after your death.
"Can a scheme administrator override my pension nomination?" Yes, the scheme administrator can override your pension nomination because it's an expression of wish, not a legally binding instruction. However, they will usually follow your nomination unless there are compelling reasons not to, such as changed family circumstances or if nominated beneficiaries cannot be located.
Common Misconceptions
Myth: My pension will automatically be dealt with by my executor as part of my will
Reality: Your pension is not controlled by your will and your executor has no authority over it. The scheme administrator decides who receives your pension death benefits based on their discretion, your pension nomination form, and scheme rules. Your executor administers assets passing through your will; your scheme administrator administers your pension—two completely separate processes.
Myth: The scheme administrator is the same as the pension trustee
Reality: The scheme administrator and trustees have different roles, although sometimes the same people fulfill both functions. Trustees are responsible for governing the pension scheme—investment decisions, ensuring proper funding, protecting members' interests. The scheme administrator handles day-to-day operations—processing contributions, keeping records, tax compliance, paying benefits. In occupational pension schemes, trustees often appoint themselves as scheme administrator, but the legal responsibilities differ.
Related Terms
- NHS Pension Scheme: The specific pension scheme for NHS workers that is administered by the NHSBSA as scheme administrator.
- NHSBSA: The NHS Business Services Authority that serves as the scheme administrator for the NHS Pension Scheme.
- Pension Nomination: The expression of wish form that the scheme administrator reviews when deciding who receives death benefits.
- Defined Benefit Pension: A type of pension where the scheme administrator calculates benefits based on salary and service years.
- Trustee: The governing body of a pension scheme that oversees the scheme administrator's work but has different legal responsibilities.
- Beneficiary: The people who receive pension death benefits as decided by the scheme administrator using their discretion.
Related Articles
- NHS Pension and Your Will: A Complete Guide
- Receiving an Inheritance: What Do You Need to Do?
- Power of Attorney vs. Executor: Key Differences
- How Does Bankruptcy Affect a Will or Inheritance?: Explains why pensions administered by scheme administrators may avoid creditors in bankruptcy situations.
- Does Your Pension Form Part of Your Estate?: Addresses whether pensions are estate assets and explains the scheme administrator's discretionary role.
- How Life Insurance Payouts Work With a Will: Draws parallels between insurance beneficiary nominations and pension nominations handled by administrators outside probate.
Need Help with Your Will?
Understanding that your pension is administered separately from your will highlights the importance of comprehensive estate planning. While your will controls most assets, your pension requires separate attention through pension nomination forms.
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Legal Disclaimer:
This article provides general information only and does not constitute legal or financial advice. WUHLD is not a law firm and does not provide legal advice. Laws and guidance change and their application depends on your circumstances. For advice about your situation, consult a qualified solicitor or regulated professional. Unless stated otherwise, information relates to England and Wales.