Whilst the accounts are an important document to reflect the historic value of the pension scheme, most trustees need to know if they have the ability to cover important payments such as PAYE tax or the pension payments within the correct deadlines.
Failure to make key payments on time and regularly could result in an automatic red light reporting failure with the Pension regulator
In most cases delays in making payments are based on not having the necessary funds in place. Pension schemes will typically receive monies regularly through contributions and, potentially, income from investments, and also make payments, such as monthly pensions, lump sums on retirement and transfers out. Balancing the cash between that received and that due to be paid out is crucial. Investment and dis-investment with fund managers comes at a cost – there are usually costs involved for each transaction and therefore these need to be managed carefully.
Anecdotal evidence from pension scheme trustees suggests that in many cases, cash flows are not being adequately managed.
We are able to provide regular cash flow forecasting and reporting for pension schemes so you can review the financial state of the scheme and to look at potential issues ahead. These reports are ideal for trustee meetings so key financial decisions can be made. We typically provide cash flow management alongside a fully financial administration service.