Research and analysis

Understanding pension scheme administrators and their needs for migrating to the Managing Pension Schemes service

Published 20 July 2023

Qualitative research providing insights into the population of pension scheme administrators and their awareness of and views on IT platform changes.

HM Revenue and Customs (HMRC) Research Report 701.

Research conducted by IFF Research between October and December 2022. Prepared by IFF Research (Sarah Howell, Rob Warren, Luke Osborne, Joseph Charsley) for HMRC.

Disclaimer: The views in this report are the authors’ own and do not necessarily reflect those of HMRC.

1. Glossary

Term	Definition
Pension scheme	A way in which a person can save money for later life. There are personal and workplace/occupational pension schemes.
Pension scheme administrator	All registered pension schemes must have at least one scheme administrator. The scheme administrator can be: one or more individuals; a company or organisation such as an employer; a specialist pension administration company; or a partnership.
In-house administrator	The research identified ‘in-house administrators’ who manage schemes open for the employees of the company they work for.
Third-party administrator	The research identified ‘third-party administrators’ who manage schemes set up for employees of other companies.
Third-party practitioner	Scheme administrators can appoint a practitioner to act on their behalf in connection with the management of the pension scheme. For example, they may appoint: a third-party provider of administration services, an accountant/auditor, a legal adviser, or someone else.
Pension scheme trustee	Pension schemes that are set up under trust will have at least one trustee appointed and will often have more. Pension scheme trustees can be individuals, corporate trustees or trust corporations and there can be any combination of those types of trustee where a scheme has appointed more than one trustee. However the trustees of a scheme are comprised, they own the assets and administer the scheme in accordance with the scheme’s trust deed and rules solely for the benefit of members and any other beneficiaries.
Accounting for Tax return	The scheme administrator is subject to tax charges when their registered pension scheme makes certain payments. Most of these tax charges must be reported and paid to HMRC using the Accounting for Tax return. This is a quarterly return that must be sent to HMRC together with the tax due.
Event Report	There are some events that occur in a registered pension scheme that must be reported to HMRC using the Event Report. See more information on events to be reported.
Relief at source scheme	Relief at source is a way of giving to the Pensions scheme the amount of basic rate tax relief on pension contributions a member has made. The scheme will get the member’s tax relief at the relevant basic rate as a member’s contributions are taken from their pay after their wages are taxed. The scheme administrator claims the basic rate tax relief from HMRC and adds it to the pension pot. The member claims any additional relief, above the basic rate, through their tax return.

2. Executive Summary

2.1 Background and methodology

All registered pension schemes must have at least one pension scheme administrator who is responsible for ensuring that the correct pensions tax reliefs and charges are reported to HM Revenue and Customs (HMRC), and necessary tax payments are made.

HMRC currently provides 2 platforms for pension scheme administrators to manage registered pension schemes:

• Pension Schemes Online service – the legacy pensions administration system
• Managing Pension Schemes service – the digital service launched in 2018 which will enable pension scheme administrators to fulfil all their pensions tax obligations in one place when fully rolled out

Any pension schemes set up since the launch of the Managing Pension Schemes service, in 2018, must be registered on the new system. The Pension Schemes Online service is being phased out and, since April 2022, pension scheme administrators can migrate their schemes to the Managing Pension Schemes service.

Some pension scheme administrators may migrate their schemes driven by the need to submit Accounting for Tax returns which since April 2022, can only be compiled and submitted on the Managing Pension Schemes service. (See more information about submitting Accounting for Tax returns). ​However, where this is not the case, HMRC are also undertaking communication activities to ensure that pension scheme administrators are aware of the need for them to take action to migrate their schemes.

HMRC commissioned IFF Research to provide insights into the population of pension scheme administrators, including their awareness, attitudes, and barriers to migration to the Managing Pension Schemes service. A total of 45 in-depth interviews, lasting up to 60 minutes, were conducted by telephone and video conferencing. Five of the interviews were conducted with those who were known to have engaged with HMRC about migration.

2.2 Main findings

2.2.1 Characterising pension scheme administrators

Using the information collected in the interviews, participants were segmented into 5 typologies based on the size and structure of the business, pension scheme administration practices, and sources used to keep up-to-date with pension information. Key differences between the typologies include whether they were an in-house or third-party administrator, and the number of pension schemes managed.

• Typology 1: In-house administration; nano/micro businesses, administering a single scheme, few members (1-11)
• Typology 2: In-house administration; small/mid-size business, administering a single scheme, several members (12+)
• Typology 3: In-house administration; small or mid-size or large businesses, administering multiple schemes (2–5) within the business, varied scheme sizes
• Typology 4: Third-party administration; former employees administering one or 2 schemes
• Typology 5: Third-party administration; pension scheme administrator administers schemes for a client company; multiple schemes (2 -5)

For more information, see Chapter 4 of this report. Case studies which illustrate an example of each typology can be found in Appendix A. Note that, while the typologies do help us understand the types of pension scheme administrators in the population, and paint a picture of what they may look like, they do not establish anything quantitatively such as the relative sizes of these groups within the overall population.

Many of the pension scheme administrators that took part in the research did not allocate much time to pension scheme administration tasks. However, as might be expected, where pension scheme administrators in our sample managed greater numbers of schemes, they reported spending more time on these types of tasks.

Not many of the pension scheme administrators we spoke to proactively looked for information on pension schemes and many relied on their practitioners to tell them what to do. However, again, where they managed a greater number of schemes, they reported looking at a greater number of sources and were sometimes members of industry bodies. Most interviewees did not rely on HMRC channels for updates on pension information.

2.2.2 Awareness of the need to migrate

Awareness of migration was low among the pension scheme administrators who participated in the research (excluding those who were known to have already engaged with HMRC). However, ‘third-party pension scheme administrators’, managing schemes for employees of other companies (typologies 4 and 5), were more likely to be aware.

Among those who were aware, only a few pension scheme administrators had found out about migration through communication from HMRC. Others had heard about migration through a third-party practitioner or adviser.

During the interviews, pension scheme administrators were asked if they were aware of migration to Managing Pension Schemes, and were then prompted with a description of what migration involves (see Appendix B). Some of the pension scheme administrators interviewed then clarified that they had in fact migrated their schemes to the new system, but were not familiar with the language of ‘migration’.

2.2.3 Barriers to and benefits of migration

Upon being made aware of migration, most participants were not yet sure what to think about it. Some pension scheme administrators provided their thoughts on the benefits that migration might bring, including making the system easier to navigate and the ability to see all pension schemes together in one place. Meanwhile, some raised concerns that it could create increased complications and costs.

2.2.4 Taking action and HMRC support

Most the pension scheme administrators we spoke to had not taken any action to migrate their schemes. The main reason for this was their lack of awareness of migration.

For the few pension scheme administrators we spoke to who had heard of migration but had not taken action, there were 2 key reasons: either they had not yet needed to; or they were of the belief it would be the responsibility of the third-party practitioner.

When made aware of migration, participants reported several possible reactions:

• some said they would do nothing and wait to hear from HMRC directly
• some reported they would do nothing and assume their practitioner will take care of it
• others said they would speak to their practitioner for more information
• and others said they would search other sources for more information

When asked about what support might help to assist migration, most participants said they would like to receive an email directly from HMRC with clear guidance on the steps they need to take.

2.2.5 Experiences of migration

The pension scheme administrators that had migrated their pension schemes to Managing Pension Schemes had experienced some challenges and had either contacted HMRC or their advisor for assistance with a variety of problems. The problems they encountered included: accidentally re-registering their pension schemes; getting stuck following the instructions; or finding the process time-consuming.

3. Research approach

3.1 Background

All registered pension schemes must have at least one pension scheme administrator who is responsible for ensuring that the correct pensions tax reliefs and charges are reported to HMRC, and necessary tax payments are made.

HMRC currently provide 2 platforms for pension scheme administrators to manage registered pension schemes:

• Pension Schemes Online service – the legacy pensions administration system
• Managing Pension Schemes service – the digital service launched in 2018 which will enable pension scheme administrators to fulfil all their pensions tax obligations in one place when fully rolled out

Any pension schemes set up since the launch of the Managing Pension Schemes service, in 2018, must be registered on this system. The Pension Schemes Online service is being phased out and since April 2022, pension scheme administrators can migrate their schemes to the Managing Pension Schemes service.

Some pension scheme administrators may migrate their schemes driven by the need to submit Accounting for Tax returns which since April 2022, can only be compiled and submitted on the Managing Pension Schemes service. ​ (See more information about submitting Accounting for Tax returns). However, where this is not the case, HMRC are also undertaking communication activities to ensure that pension scheme administrators are aware of the need for them to take action to migrate their schemes.

3.2 Objectives

HMRC commissioned IFF Research to explore pension scheme administrators’ awareness, attitudes, and barriers to migration to the digital Managing Pension Schemes service. The research had 3 core objectives:

• to provide insights into the population of pension scheme administrators, including those who have engaged with HMRC about migration from Pension Schemes Online service to Managing Pension Schemes service, but particularly those who have not already engaged

• to understand pension scheme administrators’ views on migration and what barriers they anticipate encountering when taking action

• to facilitate segmentation of the population of pension scheme administrators, in order to allow for effective targeting of communications

3.3 Methodology

A random sample of pension scheme administrators was selected from a cut of all Pension Schemes Online service data and supplied to IFF by HMRC. The sample was also matched by HMRC to Self Assessment and Companies databases to verify addresses and append telephone numbers. Individuals were initially asked questions from a recruitment screener, to ensure that the registered pension scheme administrator, rather than a practitioner acting on behalf of the administrator, was recruited to take part.

A total of 45 in-depth interviews were conducted by telephone and video conferencing between 19 October and 2 December 2022. Interviews lasted up to 60 minutes and a charity donation of £30 was made on behalf of each respondent as a thank you for their time.

During the interviews, pension scheme administrators were asked if they were aware of migration to Managing Pension Schemes to test their ‘unprompted’ awareness and understanding. After this, they were then prompted with a description of what migration involves (see Appendix B). Some of the pension scheme administrators interviewed then clarified that they had in fact migrated their schemes to the new system but were not familiar with the language of ‘migration’.

The purpose of qualitative research is to explore the full range of views on a topic or issue, looking to understand how and why these views are expressed by respondents. It is not the role of qualitative research to provide statistically representative findings that can be applied to the underlying population. However, it can provide information to help understand the differences in attitudes and behaviours between different types of pension scheme administrator.

3.4 Profile of research participants

To ensure sufficient representation of the different types of pension scheme administrators, target quotas were agreed prior to the fieldwork starting.

The primary quota was based on the number of schemes managed by the pension scheme administrator (whether they manage a single scheme or multiple schemes). The maximum number of schemes managed was 5 among those interviewed. Recruiting those administering a larger number of schemes proved to be slightly more challenging. We know that there is a segment of pension scheme administrators managing large numbers of schemes, including large-scale professional pension scheme administration services companies, who are not included in this research. However, HMRC was less concerned with speaking to these pension scheme administrators because they are more likely to already be aware of migration and to have engaged with HMRC.

Quotas were also applied around the size of the scheme, based on the number of members in the scheme (specifically, the largest scheme where they managed more than one). Another quota was set based on whether they were an in-house or third-party pension scheme administrator. In-house administrators were those who managed schemes open for the employees of the company they work for and third-party administrators were those who managed schemes set up for employees of other companies. There were a couple of cases where both applied: accountants who were the pension scheme administrator for a scheme for their own employees and were also the pension scheme administrator for a pension scheme on behalf of a client.

A ‘soft’ quota was set based on when the administrator last contacted HMRC in relation to pension scheme administration and the type of pension scheme they managed (personal or occupational). Another ‘soft’ quota was set based on whether the pension scheme administrator was also a trustee.

Finally, the research intentionally targeted 5 ‘engaged’ cases, those where HMRC could see they had already started to take action to migrate their schemes.

Table 1 - Achieved interviews by quotas set

Quota category	Quota	Interviews achieved
Number of schemes managed	1	27
Number of schemes managed	2+	18
Number of members in (largest) scheme	1 - 11	23
Number of members in (largest) scheme	12 - 10,000	21
Number of members in (largest) scheme	10,000+	21
In-house vs third-party	In-house	35
In-house vs third-party	Third-party	8
In-house vs third-party	Both	2
Other	Engaged cases	5
Other	Pension scheme administrator is trustee	12
Frequency of contact with HMRC	Within last 12 months	27
Frequency of contact with HMRC	1 - 2 years ago	1
Frequency of contact with HMRC	2 - 3 years ago	3
Frequency of contact with HMRC	Don’t know/dealt with by third-party	13
Scheme type	Personal	19
Scheme type	Occupational	26
All categories	Total	45

4. Characterising pension scheme administrators

The research aimed to identify different types of pension scheme administrators, and characterise those that participated in the research, to enable HMRC to consider effective communication approaches. Using the information collected in the interviews, participants were segmented into 5 typologies based on their characteristics, behaviour regarding pension administration, and sources used to keep up-to-date with pension information.

4.1 Typology formation

Research participants were asked several questions aimed at identifying the characteristics of their business and the pension schemes they manage. These questions included:

• their job role and proportion of time spent on pension tasks
• their business characteristics such as the number of employees, turnover, and business focus
• if they use a third-party pensions advisor or practitioner
• the number of schemes, types of schemes, and size of schemes managed
• whether they are a trustee in addition to their administration duties
• whether they actively look for information on tax issues and pension industry issues and if so, the sources of information they use
• their past experiences of dealing with HMRC, specifically the frequency and nature of contact
• their internal processes for pension administration

The answers to these questions have been used to create typologies. These typologies were created by grouping those with similar responses and key characteristics together into groups that could be used to target communications about migration. Due to the typologies being built upon qualitative information, this research did not aim to profile the overall population of pension administration practitioners in a statistically representative way. While this does help us understand the types of pension scheme administrators in the population and paint a picture of what they look like, these typologies do not establish anything quantitatively such as the relative sizes of these groups within the overall population.

Each typology is discussed below. Typologies 1-3 consist of in-house administrators, whilst typologies 4-5 consist of administrators who manage schemes for other companies.

4.2 Typology 1: In-house administration; nano/micro businesses, single scheme, few members (1-11)

Typology 1 includes nano and micro businesses that have a single pension scheme with few members (1-11). The pension scheme administrator is often the owner of the business who may also serve as a trustee. These administrators may use a practitioner, usually an accounting business, to handle their pensions tax affairs.

Typology 1 administrators do not typically submit their own Accounting for Tax returns or Event Reports, as their practitioner handles these tasks. Pension administration duties take up a very small part of their role, sometimes going years without interacting with the scheme. They were sometimes unable to recall whether they have used the Pension Scheme Online Services themselves. Some comments suggested there may be a level of confusion around pension administration activities and other pension responsibilities, such as tax returns and trustee duties.

They do not actively seek advice or information regarding their pension scheme and rely on their practitioner to inform them of tasks that need to be completed. They are not members of any pension industry groups and therefore do not receive pensions updates and information in that way.

4.3 Typology 2: In-house administration; small/mid-size business, single scheme, several members (12+)

Typology 2 is characterised by pensions scheme administrators from small to mid-sized businesses with a single pension scheme that has several members (12 or more). In this case, the businesses’ tax consultant usually provides advice and notifies the administrator if there are any tasks that need to be completed. However other individuals within the business or externally (e.g. finance staff, human resources staff, or pension administration practitioners) may also provide some help and advice.

Some of the pension scheme administrators we spoke to would do the administration work themselves, using the Pension Scheme Online Service, and some use a practitioner. Overall, pension administration work is not frequent for them and forms a very small part of their job role. Again there was evidence of some possible confusion around pension administration activities and other pension responsibilities.

In terms of keeping up-to-date with pensions administration information, participants in this typology reported sometimes proactively looking for information from the Pensions Regulator and although they did not report receiving HMRC newsletters, they may occasionally check for information on the GOV.UK website. They are not members of any pension industry groups.

4.4 Typology 3: In-house administration; small or mid-size or large businesses, multiple schemes (2–5) within the business, varied scheme sizes

Typology 3 refers to pension scheme administrators who administer multiple schemes (2-5), of varied scheme sizes, in-house. The businesses they work for may be small, mid-size or large. Within the businesses we spoke to, there were sometimes up to 4 pension scheme administrators, who may be directors involved in finance or human resources. They could be trustees as well.

The administrators we spoke to may use consultants who advise and help administer their tax obligations. However, they reported conducting the pension administration duties themselves and were familiar with the Pension Scheme Online Service system. Pension-related activities take up a significant portion of their time. This typology seemed to have a better understanding of their pension scheme administration duties than the other in-house administrators.

The administrators we spoke to from typology 3 are sometimes members of pension industry groups, such as Pensions and Lifetime Savings Association, The Pension Scams Industry Group, or The Institute of Chartered Accountants in England and Wales. They receive bulletins from the Pensions Regulator and sometimes proactively seek pension information. Some of these businesses use the HMRC website, but they do not receive HMRC’s pensions newsletters.

4.5 Typology 4: Third-party administration; former employees managing one or 2 schemes

Typology 4 consists of former employees who are administering one or 2 pension schemes for small businesses that they may have co-founded or businesses of family and friends. They are self-employed with no employees and usually undertake the pensions administration activities directly, rather than using a practitioner, and were familiar with the Pensions Scheme Online Service. Pension administration responsibilities take up a small amount of their time, and they may also be a trustee.

The administrators in this group that we spoke to were not members of any industry groups. They would rarely engage with pension information, but they would turn to the Pensions Regulator and HMRC as their first point of contact if they had any concerns.

4.6 Typology 5: Third-party administration; managing several schemes for companies they have never been employed by

Typology 5 refers to the pension scheme administrators we spoke to who administer multiple schemes for client companies. They offer both accounting and pension services to their clients, with pension administration being a part of the package. Although pension administration responsibilities take up a small amount of time, it is relatively more than for typology 4, the former employees group.

These administrators are often self-employed with no employees and work in a tax or pensions professional business. They may also serve as trustees of the schemes they administer. Additionally, they are often members of industry groups, though the specific groups may vary. These groups included the Pensions Administration Standards Association, the Association of Consulting Actuaries, the Institute of Chartered Accountants in England and Wales, the Pensions Management Institute, and the Association of Professional Pensions Trustees. These administrators proactively seek information on pensions administration and use the Pensions Regulator website as well as HMRC bulletins.

5. Awareness of migration to the Managing Pension Schemes service

This chapter focuses on the awareness of migration to the Managing Pensions Schemes service among pension scheme administrators who had not engaged with HRMC about it. This chapter also includes awareness of the new relief at source digital services.

5.1 Low awareness of the need to migrate

Generally, awareness of migration among all pension scheme administrators was low, particularly among the pension scheme administrators we spoke to who manage schemes in-house (from typologies 1 to 3). However, among the pension scheme administrators from typologies 4 and 5, who were managing pension schemes for employees of another company, some said they were aware of migration.

5.2 Sources of information on migration

Some of the pension scheme administrators that participated in the research had seen communication from HMRC on migration to the Managing Pension Schemes service. However, they reported being unsure which HMRC channel the information had come from and suggested that it might have been included in an email. They either felt unable to comment on the effectiveness of the communication or they did not think it was relevant to them.

“It is not applicable to me, as I am only the administrator and not the practitioner on the schemes.” (Administers 3 schemes, 1-11 members, third-party)

The other pension scheme administrators that were aware had heard from third-party sources which included industry circulars, discussions with other professional trustees and news bulletins from legal advisors.

“[Heard about it] in a discussion with some other professional Trustees…Somebody brought it up…The general feeling was that it would be a positive move.” (Administers 3 schemes, 10,000+ members, third-party)

After being asked about their awareness of migration to Managing Pension Schemes, all participants were read out a brief explanation of migration and what it entailed. Some pension scheme administrators who initially said they were unaware of migration showed some level of awareness after this explanation. These respondents were mostly unaware of the term ‘Managing Pension Schemes’ or the terminology of migration and had not seen any communications from HMRC. However, a couple appeared to have already migrated their schemes and one commented that they had noticed some changes on the website while submitting returns implying that they may have already migrated their schemes to the Managing Pension Schemes service.

“Well, I think what you’ve described is something that I’ve already got but maybe I wasn’t aware that it was called Managing Pension Schemes…what you have described is the new online view and it is very different from the old Pension Schemes Online service which you used to submit the old returns…I didn’t know what it was called.” (Administers 4 schemes, 1-11 members, third-party)

5.3 Understanding of migration requirements and responsibilities

Unsurprisingly, given the low awareness of migration among the pension scheme administrators we spoke to, participants generally did not have any understanding of migration requirements and responsibilities.

Pension scheme administrators were asked whether they understood what was happening with the migration of pension schemes and whether they knew what it involved. Those who were already aware of migration and felt able to comment on it had contrasting thoughts on what it involved, and none spontaneously mentioned their responsibilities to facilitate it.

“I think it’s meant to renew multiple registrations to make it simpler. But since I don’t have multiple ones, I don’t think that’s a problem”. (Administers 3 schemes, 1-11 members, third-party)

“Believe that it is basically a move in the direction of getting everything online in an effort to do away with paper returns.” (Administers 4 schemes, 1-11 members, third-party)

“Assume it is being done to modernise the HMRC records…to collect better, more accurate information”. (Administers 3 schemes, 12-10,000 members, third-party)

As mentioned above, during the interview, a brief description of migration was read out to respondents. Those who were aware of migration were subsequently asked whether it aligned with their understanding and there was a mixed response to this question. Some respondents said that they had no previous understanding of what migration involved so did not have a view. Others said that this description did align with what they had heard. One respondent stated that they had previously misunderstood what migration meant, and that the explanation had informed them of their responsibilities as an administrator.

“I knew I had to do something, but I wasn’t quite sure what.” (Administers 3 schemes, 1-11 members, third-party)

5.4 Awareness of the relief at source fully digital service

The pension scheme administrators interviewed who administered relief at source schemes all said they were unaware that HMRC intends to have a fully digital service that will replace the current relief at source paper service. However, it should be noted that only 4 participants in the research administered such schemes.

Some pension scheme administrators said they would like to receive information about it and were signposted to the newsletter on the GOV.UK website.

6. Views on migration

This chapter explores the views on migration to the Managing Pensions Schemes service among those pension scheme administrators who had not engaged with HMRC about it. The experience of those who had already engaged with HMRC about migration is covered in chapter 9 of this report.

6.1 Initial reactions to the description of migration

After the description of migration was read out to respondents, they were asked to provide their thoughts on what they had just heard. Generally, pension scheme administrators were unsure what to think and felt they did not yet fully understand what pension scheme migration involved, both in terms of how it would affect their processes and who would be responsible for dealing with it. Some respondents said they would look for more information, either through searching for it themselves or talking to third parties such as their practitioner or accountant who may be able to provide further insight.

“Well only that HMRC is generally across the board updating all of their systems and it might be something to do with that…I need to find out more information…” (Administers 3 schemes, 1-11 members, in-house)

“As far as I’m aware, [third-party practitioner] do everything for us. Perhaps I need to talk to them… I will check with them.” ( Administers 1 scheme, 12-10,000 members, in-house)

6.2 Perceived barriers to, and benefits of, migration

Many of the pension scheme administrators we spoke to said that they did not have any strong views or concerns about it, provided everything worked.

“I don’t really have a feel for what the new service might involve. If it ends up being more user friendly that’s fine.” (Administers 5 schemes, 1-11 members, in-house)

After the description of migration was read out to respondents, they were also asked to provide their thoughts on why they think the Managing Pension Schemes service might be being introduced.

Most pension scheme administrators were not able to offer a view on why this was happening. Some assumed it was being done to make the system easier to use, though they did not specifically mention what they expected to be made easier.

“Not really - other than making it easier?” (Administers 1 scheme, 1-11 members, in-house)

“I don’t know enough to say if there would be a benefit or otherwise.” (Administers 1 scheme, 12-10,000 members, in-house)

6.2.1 Concerns and perceived barriers to migration

Some of the pension scheme administrators we spoke to expressed concerns about the new system, which were based on past experiences of changes to various HMRC or government systems, rather than tangible concerns related to this specific migration. For example, some wondered whether it would bring complications and whether it would add extra steps to the process of pension returns.

“What you often find is that the new software requires more steps. It’s meant to be simpler, but it has more windows, and it’s not as quick” (Administers 4 schemes, 1-11 members, in-house)

Other concerns included any extra costs that migration might incur, including potentially needing to purchase third-party software and the time and difficulty involved in migrating their systems.

“Will it involve a third-party?… What extra are you being given for the change?… But my main concern is that a third-party will become involved…and the cost.” (Administers 1 scheme, 1-11 members, in-house)

“I can only foresee that it might be difficult.” (Administers 3 schemes, 1-11 members, third-party)

Some felt that migration should be done automatically and did not understand why it was their responsibility to migrate their pension schemes.

“Silly to rely on me to do it…. Why did I have to register? Why couldn’t they just automatically register everybody who was registered under the PSO before?” (Administers 3 schemes, 1-11 members, in-house)

Some also mentioned that they were resistant to change; they felt that the current system worked so questioned why there was a need to change the system.

“Why do something different, it works now, why change it?” (Administers 1 scheme, 1-11 members, in-house)

6.2.2 Benefits and perceived opportunities of migration

Some pension scheme administrators provided their thoughts on the benefits that migration might bring, including making the system easier to navigate and the ability to see all pension schemes together in one place.

“Anything that’s going to make administration easier is good.” (Administers 5 schemes, 12-10,000 members, in-house)

“It’s a positive move. It will be very advantageous to log on and see all the schemes at a time and make submissions from there.” (Administers 3 schemes, 12-10,000 members, third-party)

Participants also felt that the migration would benefit HMRC as they thought it would be another update in a line of updates that HMRC were conducting to their online systems, on the way to making everything digital.

“It was inevitable, everything becomes digital these days.” (Administers 1 scheme, 1-11 members, In-house)

“It would make sense, because I’m aware that the pension dashboard is being created.” (Administers 1 scheme, 12-10,000 members, in-house)

7. Taking action to migrate schemes to Managing Pension Schemes service

This chapter sets out why pension scheme administrators had not taken any action to migrate their schemes, what might motivate them to take action, and what they felt might be the consequences of not taking action.

7.1 Reasons for not having taken action

Most of the pension scheme administrators we spoke to were unaware of the system migration and this was the most common reason they had not taken any action to migrate their pension schemes. For the few administrators who had heard of migration but had not acted, the main reason was they did not understand at whose door the responsibility lay.

“I’m not sure if I needed to [take any action] or not.” (Administers 3 schemes, 1-11 members, third-party)

“It’s possible the administrators might have done the migration already, hence why I need to speak with them.” (Administers 1 scheme, 12-10,000 members, third-party)

In addition, one said they had not yet needed to take action, as they hadn’t been required to submit any Accounting for Tax returns or Event Reports.

7.2 Plans for taking action

After hearing the description of migration during the interview, pension scheme administrators were asked what action, if any, they would now take. Most said they still didn’t plan to take any action because they wanted to wait until they had heard directly from HMRC, with a small number mentioning they would take action if they were informed that the migration was a statutory requirement. Others said they would not take any action because they believed that it was the responsibility of a third party, such as their practitioner, to migrate their pension schemes.

“[Any plans for action?] Not that I’m aware of, unless something comes down from HMRC, because you can’t ignore them.” (Administers 1 scheme, 12-10,000 members, in-house)

“Nothing - unless somebody tells me I’ve got to do it - and to do it, they’ll have to get in touch with me. If the government wants me to change something, they’ll have to tell me.” (Administers 1 scheme, 1-11 members, in-house)

“No action until I hear from the professionals – the accountants for the company.” (Administers 1 scheme, 1-11 members, in-house)

Some respondents said that they would contact other parties for advice on what to do.

“I think I will need to talk to the administrator first. I’ll just advise him that it’s changing from the Pension Scheme Online Service to the Managing Pension Scheme Service…If he knows how to do it, he may tell me.” (Administers 1 scheme, 1-11 members, in-house)

Some said that they would look for further information online, including GOV.UK, the HMRC website and the Pensions Regulator website. Additionally, some respondents stated that they would be motivated to migrate if they needed to submit a return or if they were unable to administer their pension schemes without migrating. However, so far, they had not found a need to look into it.

“I submit the annual return to HMRC in June or July so will look into how to migrate nearer this time next year.” (Administers 1 scheme, 1-11 members, third-party)

Some assumed there would be a deadline for when they needed to migrate, but because they were unaware of it, they were not motivated to migrate their schemes.

“I would like communication about this at least 3 months in advance of the deadline, this would definitely motivate me.” (Administers 1 scheme, 12-10,000 members, in-house)

7.3 Anticipated consequences of not migrating schemes

Some of the pension scheme administrators that were interviewed were of the view that nothing would happen if they did not migrate their schemes, often because they felt the responsibility lay with a third-party practitioner to deal with the administration for them or because the schemes they manage have very few members.

“It would be pointless doing it. There are 2 members in this scheme.” (Administers 1 scheme, 1-11 members, in-house)

Some assumed there might be penalties or fines if they did not act but could not comment on the extent of the fine or when it might be implemented. These assumptions were generally based on previous experience with HMRC.

“Generally, with HMRC they start threatening you with fines.” (Administers 1 scheme, 12-10,000 members, in-house)

Despite this, there was not much concern about fines being imposed and respondents assumed that there would be more clear, direct communication from HMRC and potentially an extension to any deadline before they needed to do anything.

“Typically, they will normally extend the runoff period. That’s what historically happens. There are still people doing manual VAT returns.” (Administers 3 schemes, 12-10,000 members, in-house)

Some pension scheme administrators thought that if they did not migrate their schemes, they would be unable to submit pension information to HMRC. Some respondents expected to receive reminders or correspondence from HMRC about migration and the consequences of not migrating.

“I assume I won’t be able to do a return [using the old system], which is not a good thing. Getting penalties for not doing a return.” (Administers 3 schemes, 1-11 members, third-party)

“I don’t know, because you said the only ones that could be migrated are open schemes, and I’m not quite sure if I am an open scheme…It may not even apply to me.” (Administers 1 scheme, 1-11 members, in-house)

8. HMRC support for pension scheme migration

This chapter covers what HMRC can do to support pension scheme administrators to migrate their schemes.

8.1 Communication preferences

Pension scheme administrators were asked where they would look for further information and whether there was anything that would help them migrate their schemes to the new system. Generally, administrators wanted direct, clear communication from HMRC, most commonly in the form of an email containing clear instructions of how to migrate.

“Simple instructions on what I need, in terms of software and who to contact for help. This is what I’d expect from the HMRC - via email, just the once!” (Administers 1 scheme, 1-11 members, third-party)

Other things that pension scheme administrators mentioned would help included screenshots showing the steps they needed to take, either in the form of a webinar, video tutorial or via email. A number of pension scheme administrators mentioned that they would attend any training on migration, if it was offered.

“HMRC might provide assistance similar to the webinars that they provided for Making Tax Digital, that would be helpful. There seems to be a lot more webinars and that sort of thing…something like that would be good…and if the recordings were available, you could watch them afterwards.” (Administers 3 schemes, 12-10,000 members, in-house)

Some pension scheme administrators highlighted concerns around the complexity of what might be required. One administrator said they would like HMRC to provide guidance that someone who is not computer-literate can manage with.

The responses suggest that a variety of instruction materials would be useful to suit different pension scheme administrator preferences. They also highlight that the communication should be clear, with visual and written instructions.

9. Experiences of migration

This chapter explores the experiences of migration for those who had already migrated their pension schemes to the Managing Pension Schemes service.

9.1 Sources of information on the migration to Managing Pension Schemes service

As set out in section 3.4, the recruitment process deliberately targeted a group of ‘engaged’ pension scheme administrators i.e. those who had already started to take action to migrate their schemes. The 5 engaged cases recruited fell into typologies 1 (pension scheme administrators managing a single in-house scheme, with up to 11 members) and 3 (pension scheme administrators managing multiple schemes within the business).

Engaged pension scheme administrators had heard about migration through a variety of ways, including via their third-party practitioner who usually manages the scheme, through a third-party advisor, or directly from HMRC.

9.2 Reasons for taking action

Four of the 5 engaged pension scheme administrators had taken all action required to migrate their scheme(s) because they needed to submit an Accounting for Tax return or because they simply wanted to get it done. One pension scheme administrator explained that HMRC had got in touch and provided instructions and they were given a deadline of when to complete it by.

“The period in which to do it was relatively quite long, but the way we operate, if we can do something as soon as possible, we attempt to do it.” (Administers 1 scheme, 1-11 members, in-house)

The remaining engaged pension scheme administrator had not yet needed to migrate their pension scheme but had been informed by their practitioner that their involvement would be nothing to minimal.

9.3 Additional participants who had taken action

A total of 7 pension scheme practitioners had migrated their schemes. Outside of the ‘engaged’ group, there was one pension scheme administrator who had knowingly completed migration process. As mentioned earlier in the report, there were also 2 pension scheme administrators who initially said they had not heard about migration to the Managing Pension Schemes service. However, when it was outlined during the interview, they acknowledged they are using a new platform (so appeared to have migrated their schemes).

9.4 Experiences of the process

The pension scheme administrators who appeared to have migrated their schemes as they acknowledged they were using a new system/portal did not highlight any challenges associated with migration.

“No opinion, but it must have been fairly smooth.” (Administers 1 scheme, 10,000+ members, third-party)

However, others had experienced challenges when trying to migrate their schemes and had either contacted HMRC or their advisor for assistance with a variety of problems. The issues experienced included:

• accidentally re-registering their pension schemes
• getting stuck following the instructions
• finding the process time-consuming

Those who accidentally re-registered their pension schemes found the process and guidance unclear:

“I’d chosen the wrong option, because it wasn’t obvious what option I should choose.” (Administers 2 schemes, 12-10,000 members, in-house)

One pension scheme administrator felt the communication was clear upon reading it, however, experienced challenges when the instructions did not seem to work.

“The communication was clear; we knew what we had to do. We followed the instructions, it’s just that initially those instructions didn’t work…it wasn’t painful but it took a while.” (Administers 1 scheme, 1-11 members, in-house)

In relation to finding the process time-consuming, one pension scheme administrator reported that they had to re-enter the details of the third-party practitioner as this was not automatically transferred over to the Managing Pension Schemes service.

Those who experienced challenges either got in touch with HMRC via phone or sought help from a third-party. Those who contacted HMRC found the support helpful and said any issues were overcome quickly.

9.5 Views on Managing Pension Schemes service compared to Pension Schemes Online service

Most pension scheme administrators interviewed who had already migrated their schemes expressed no opinions on using the Managing Pension Schemes service compared to the Pension Schemes Online service. They explained that this was because they rarely used the system personally because they employed a third-party practitioner to undertake the administration work on their behalf.

Only one pension scheme administrator expressed stronger feelings on the matter and these feelings were mixed. They wanted to know why the Managing Pension Schemes service requested both a National Insurance number and a Unique Tax Reference number. This was an inconvenience for them. However, they also were happy with the information being more up to date on the new system as they said the old system was missing some data or that it was out of date.

None of the pension scheme administrators interviewed had experience of submitting an Event Report via the old system, and so of ‘dual running.’

10. Conclusions

This research has highlighted the characteristics of pension scheme administrators and has drawn a number of key findings to help inform HMRC’s approach to migration activities and communication.

10.1 Characteristics of pension scheme administrators

The research findings enabled 5 typologies of pension scheme administrators to be developed, based on the size and structure of the business, pension scheme administration practices, and sources used to keep up-to-date with pension information. Typologies 1, 2 and 3 were in-house pension scheme administrators, who managed at least one pension scheme for employees of the company they work for. Typologies 4 and 5 were third-party pension scheme administrators, who managed at least one pension scheme set up for employees of other companies.

It must be borne in mind that the typologies were developed from qualitative research findings, which cannot be used to make statistical generalisations about the underlying population. They provide information about the attitudes and behaviours of different types of pension scheme administrator, but they do not aim to estimate the numbers of these different types of administrator within the population.

For most of the pension scheme administrators interviewed, pension scheme administration tasks did not take up a great deal of their time. It was common for them to rely on a practitioner for at least some of their pension scheme administration duties, particularly in the case of in-house administrators from typologies 1 and 2.

Not many of the pension scheme administrators we spoke to proactively looked for information on pension schemes and many relied on their practitioners to tell them what to do. Again, this was particularly the case for administrators from typologies 1 and 2. However, where they managed a greater number of schemes, such as in the case of administrators from typologies 3 and 5, pension scheme administrators reported looking at a greater number of sources and were sometimes members of industry bodies. Most interviewees did not rely on HMRC channels for updates on pension information.

10.2 Awareness and understanding of migration

Generally, awareness of migration among all pension scheme administrators was low, particularly among the pension scheme administrators we spoke to who manage schemes in-house (from typologies 1 to 3). However, among the pension scheme administrators from typologies 4 and 5, who were managing pension schemes for employees of another company, some said they were aware of migration.

Among those who were aware, only a few had found out about migration through communication from HMRC. Others had heard about migration through a third-party practitioner or adviser.

Unsurprisingly, given the low awareness of migration among the pension scheme administrators we spoke to, participants generally did not have any understanding of migration requirements and responsibilities. However, those who were already aware of migration and felt able to comment on it had contrasting thoughts on what it involved. None spontaneously mentioned their responsibilities to facilitate it.

10.3 Taking action

When made aware of migration, participants reported several possible reactions:

• some said they would do nothing and wait to hear from HMRC directly
• some reported they would do nothing and assume their practitioner will take care of it
• others said they would speak to their practitioner for more information
• and others said they would search other sources for more information

Pension scheme administrators that had taken action reported completing the migration for a number of reasons including: needing to submit an Accounting for Tax return; being given instructions by HMRC; or because they simply wanted to get it done.

10.4 Views on migration

Some pension scheme administrators provided their thoughts on the benefits that migration might bring. One reason mentioned was making the system easier to use, though they did not specifically mention what they expected to be made easier. Others referred to making the system easier to navigate and some mentioned the ability to see all pension schemes together in one place. Participants also felt that the migration would benefit HMRC as they thought it would be another update in a line of updates that HMRC were conducting to their online systems, on the way to making everything digital.

Meanwhile, some participants raised concerns that the new system could bring complications and add extra steps to the process of pension returns. Some mentioned concerns around extra costs that migration might incur, including potentially needing to purchase third-party software and the time and difficulty involved in migrating their systems. Others questioned why the current system needed to change when the current system worked, and there was also a question around why schemes could not be migrated automatically.

10.5 Support from HMRC

When asked about what support might help to assist migration, most participants said they would like to receive an email directly from HMRC with clear guidance on how to migrate. Some suggested screenshots showing the steps they needed to take, either in the form of a webinar, video tutorial or via email. A number of pension scheme administrators mentioned that they would attend any training on migration, if it was offered.

The responses suggest that a variety of instruction materials would be useful to suit different pension scheme administrator preferences. However, participants were generally in favour of having visual and written instructions.

11. Appendix A

Case studies are based on a typical case in each typology. The names used are not the real names of the participants or businesses.

11.1 Case study of typology 1

Wendy and her husband run a legal advice business together where they are the only employees.

She administers one scheme which relates to herself and her husband. Both she and her husband are the trustees.

She and her husband spend little to no time doing anything with the scheme and pay an accountant to do all the activities alongside other business tax duties so that they can focus on core aspects of the business.

She mainly only interacts with the scheme when she is informed by her accountant to do so. She rarely looks at any other information sources and isn’t a member of any industry bodies.

11.2 Case study of typology 2

Ali works as a manager, in charge of HR, Finance, Payroll and Procurement, in a small and specialised manufacturing business. The business has around 44 employees. He has been there for most of his career.

He is the only pension scheme administrator but other members of his finance team are also involved in administering the scheme. The scheme has 35 members. He is not a trustee. He does the pension administration tasks without a third-party although he does sometimes receive advice and guidance from an external accountant who helps with tax obligations.

He spends little time actively searching for information on pensions, but does read through emails from the Pensions Regulator when they come through.

11.3 Case study of typology 3

Michael works as a Pensions Director for a large advertising company employing 4,500 employees.

He is involved in administering 2 different pension schemes with a collective total of 3,500 members. There are 4 people working on pensions administration in the team.

He spends about 60% of his time on pension related activities (other 40% on payroll) and occasionally gets advice from a legal advisor on administering the pension, but does all the administration in-house.

He regularly keeps up to date with pension industry press, and seeks information from the Pensions Regulator, legal advisors, scheme structure advisors as well as others. He does not go on the HMRC website or receive HMRC emails.

11.4 Case study of typology 4

Graham is a chartered accountant who is practically retired, but continues to help a couple of his closest clients with a few small ad-hoc tasks as well as the pension scheme administrator role.

His business was an accountancy business with him as the sole employee. He is the only one involved in administering the small schemes (2 scheme members in both) for his 2 clients.

He rarely spends time on pensions activities. He is also a trustee and these duties take up much more time than the pension scheme administrator duties.

He rarely searches for information on pensions at all but when he does he usually searches the HMRC website. He will check it before he has to do a pensions related task, but these are rare for the schemes he manages.

11.5 Case study of typology 5

Nathan and his wife are directors of their own pension accounting business. He is also employed elsewhere as an actuary pension expert.

They have 3 clients and 4 small schemes that they manage. He is the only one who conducts the pension scheme administrator duties.

He spends much less time on his own company than his employed role. He reports that pension scheme administrator duties take up less than 2% of his time.

He seeks information from the Pensions Regulator and uses the HMRC website. He also receives HMRC newsletters but confesses to ignoring them.

12. Appendix B

During the interviews, pension scheme administrators were asked if they were aware of migration to Managing Pension Schemes in order to test their ‘unprompted’ awareness and understanding. After this, they were then prompted with a description of what the migration involves, as set out below.

12.1 Statement that was read out to research participants describing the requirement to migrate pension schemes to Managing Pension Schemes service

HMRC currently provide two platforms through the Government Gateway for pension scheme administrators to manage registered pension schemes:

• Pension Schemes Online service
• Managing Pension Schemes service

Pension Schemes Online service is being phased out with all ‘open’ pension schemes’ data being moved onto Managing Pension Schemes.

Since April 2022, pension scheme administrators can migrate pension schemes registered on the Pension Schemes Online service to the Managing Pension Schemes service. In order to do this, pension scheme administrators must first enrol on the Managing Pension Schemes service. Once enrolled, you will be able to see a list of your schemes which can then be selected.

Only schemes with a status of ‘open’ on the Pension Schemes Online service will be included in the list of schemes available to migrate. You can select pension schemes from your list on the Managing Pension Schemes service, and provide up to date information on them, in order to migrate them to the service

Accounting for Tax returns can no longer be compiled and submitted on the Pension Schemes Online service. If you need to submit an AFT return, you’ll need to migrate the pension scheme to Managing Pension Schemes before you start.

Only the registered pension scheme administrator can migrate the pension schemes; it cannot be delegated to a third-party practitioner. Details on how to migrate pension schemes are available on GOV.UK.