What are the risks most likely to derail a pension scheme project?

One of the most common misconceptions about pension scheme projects is that the greatest risks are always the most obvious ones.

In reality, projects are rarely delayed by a single major issue that nobody saw coming. More often, delivery is hampered by a series of smaller challenges that emerge during the project journey, gradually impacting timelines, resources and decision-making.

Having supported schemes through a range of strategic initiatives, from buyout preparation and data remediation to governance reviews and regulatory change projects, there are several recurring themes that I see time and again.

Data quality remains a key challenge

Many projects begin with an assumption that the scheme data needed for that particular project is in relatively good shape. However, once detailed work starts, underlying issues can quickly come to light.

Missing addresses, incomplete service histories, conflicting member records, incorrect tranching and historical administration practices can all create additional complexity and require further investigation. Sometimes, a mini-project to fix the data is needed before we can return to the original project!

The earlier these issues are identified, the easier they are to manage. Waiting until the last minute to start a project often leads to avoidable delays.

Historic issues have a habit of reappearing

Pension schemes inevitably carry a degree of historical complexity.

Whether through benefit rectification work, bulk transfers or transaction preparation, projects frequently uncover decisions, practices, calculations or records that have not been reviewed for many years.

These issues are not necessarily unexpected, but they can have a significant impact on delivery if sufficient time and resource has not been built into project plans.

Small changes can become significant challenges

Another common threat to project success is scope expansion.

A project may begin with a clear set of objectives, but as stakeholders identify additional opportunities, or their priorities change, the volume of work can increase considerably.

Individually, each request may appear relatively minor. Collectively, they can alter timescales, budgets and resourcing requirements. They can also mean that project team members or decision-makers need to be swapped out.

Strong governance and change control processes are essential to ensure projects remain focused on their original objectives while allowing decisions about any additional work are properly understood and supported.

Documentation matters more than people expect

Projects often rely on historic records, trustee decisions and key documentation that may not have been reviewed for some time, or may have even been lost.

Unfortunately, these documents are sometimes only sought when they are needed urgently.

Where documentation is incomplete, difficult to locate or unavailable, project teams can spend considerable time resolving issues that could have been identified much earlier.

Time is needed at the start of a project to check that all the materials that will be needed are available. And the process, decisions and outcomes of that project itself need to be properly recorded so that they are available to support any future projects.

Governance timelines can shape project success

Technical delivery is only one element of a successful project.

Aligning your trustee meetings, board approvals and stakeholder decision-making with the technical milestones is necessary to maintaining momentum. Even well-managed projects can face challenges if governance timelines change unexpectedly, sign-off processes aren’t followed, or the key decision-makers aren’t in the room at the right time.

Clear planning and stakeholder engagement can help mitigate these risks and provide greater certainty that delivery milestones will be achieved.

Successful projects are rarely problem-free

In my experience, successful projects are not those that avoid challenges altogether.

They are the projects that identify risks early, understand dependencies and establish clear governance from the outset. When issues inevitably arise, the project team is prepared to manage them effectively, rather than be taken by surprise and chance the issues becoming problems or barriers.

As pension schemes continue to navigate increasing regulatory requirements, strategic change and growing stakeholder expectations, effective project management has never been more important in delivering successful outcomes.

Whether you’re preparing for a risk transfer transaction, managing a data project, implementing regulatory change or responding to a change at the sponsoring employer, our dedicated Pensions Project Management Office can help provide the governance, structure and oversight needed to keep delivery on track.

To learn more, visit our dedicated project management page or get in touch to watch our latest webinar “Managing the unexpected”.

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