Saving money is essential to ensure older adults have the financial resources for a long, happy retirement. Luckily, 21 million private-sector and 25.6 million government employees nationwide have access to pension plans. The United States has over $24.5 trillion invested in tax-exempt pension funds set aside for retirement. That’s a large sum of money that must be administered carefully to ensure accurate asset allocation. Pension plan administrators are hired for this exact reason. Pension plan administrators are mid- to upper-level benefits managers who manage the money contributions for a group’s pension fund. It’s their duty to make strategic investment decisions that maximize the benefits for beneficiaries. Pension plan administrators maintain full oversight for one or multiple organizations’ retirement systems to protect employees’ rights and interests.
Salary
According to the BLS, the 15,930 benefits managers, including pension plan administrators, employed in the United States earn an average yearly salary of $121,630, or $58.48 per hour. Pension plan administrators working for local government agencies earn less at $99,340. Those hired at securities and commodity brokerages make the highest at $159,200 on average.
Beginning Salary
Newly hired pension plan administrators can expect to land in the bottom 10th percentile of earnings with yearly income around $60,680. However, it’s common for pension plan administrators with years of finance experience to bring home over $150,600 per year. Those who advance into portfolio and hedge fund management can earn salaries above $335,000.
Key Responsibilities
Pension plan administrators have the primary responsibility of making certain funds are being operated in compliance with the Employee Retirement Income Security Act (ERISA). They’ll enroll entitled employees into the organization’s pension fund and disclose required beneficiary information. It’s essential to keep pristine records of every member’s:
- service dates
- contributions
- salary
- Social Security
- marital status
Administrators calculate each member’s assets and contribute accordingly. Pension plan administrators must distribute the payments to retired employees or their spouses on a proper timeline. They’re the main public contact for addressing the questions and complaints posed by fund beneficiaries. Pension plan administrators will also collaborate with HR staff to design new retirement benefits.
Necessary Skills
Being successful in pension plan administration requires having strong analytical skills to analyze investment data and assess the cost for retirement benefits. In-depth business acumen is critical for administrators to select the best plans for pension investing. Pension plan administrators need to be skilled communicators with the interpersonal abilities to convey complex benefit details to employees. Writing skills are also important for crafting materials that explain pension fund enrollment. They apply decision-making skills by aptly selecting the right contribution structures for participating employees. Pension plan administrators must have ethical, trustworthy leadership skills to control the management of large dollar amounts.
Degree and Education Requirements
Companies hiring pension plan administrators will require having at least a four-year bachelor’s degree from an accredited college. It’s common to pursuing a Bachelor of Business Administration (BBA) with a major in:
- finance
- human resources
- or economics
Aspiring pension plan administrators should take electives like:
- cost management
- financial planning
- retirement law
- investment management
More employers are preferring administrators educated at the graduate level for a master’s degree. Earning a Master of Finance or Master of Business Administration (MBA) in Finance is suggested. Those who obtain NIPA certification must also complete 40 continuing education credits every two years.
Pros and Cons of the Position
Administering a company’s pension plans will provide both rewards and challenges for finance professionals.
On the plus side, pension plan administrators have high salary potential with their own stellar retirement benefits. Job prospects exist in various industries, from government to healthcare and manufacturing, for specialization. Administrators work primarily in comfortable office settings with little or no travel. There’s room for advancement into titles like:
- compensation manager
- controller
- portfolio manager
Becoming a pension plan administrator is ideal for organizers who enjoy following set procedures that benefit many people.
On the downside, most administrators work long hours beyond the normal 9-to-5. Investing significantly in education and experience is required for promotion. Job growth is sluggish, which could lead to greater competition for pension plan administrators. Staying abreast of the latest government regulations on pension plans is also tricky and time-consuming.
Getting Started
Starting early is essential when building a career in pension plan administration. During your college career, begin gaining resume-worthy experience. Internships and co-operatives are recommended, especially in corporate HR departments with retirement plans. Having a bachelor’s degree will qualify you for entry-level jobs like:
- financial analyst
- human resources specialist
- or accountant
Working in these roles for three to five years will be required. Future pension plan administrators should gain as much experience in compensation and benefits, including 401(k) plans, as possible. Applying to graduate business schools and taking online or evening MBA courses while working full-time is smart. Professional certification is another great avenue for promotion. The National Institute of Pension Administration (NIPA) offers the Accredited Pension Administrator (APA) credential. Earning this title requires complete four courses and passing a proctored certification exam. You could also pursue the ASPPA’s Retirement Plan Fundamentals (RPF) Certificate.
Future Outlook
In late 2015, the Federal Reserve Bank raised the interest rate for the first time in nearly a decade, which has impacted pension funding. Higher corporate bond rates could help pension assets perform better. The United States’ recovering economy is hiring more employees who will qualify for pension entitlements. Large retiring members of the “baby boomer” population will also be keeping pension fund administrators busy. The Bureau of Labor Statistics predicts that job growth in compensation and benefits will grow by 6 percent through 2024. This will only spark around 1,100 new jobs in this niche financial career. Pension plan administrators can find favorable prospects in:
- private corporations
- hospitals
- HR consulting firms
- investment brokerages
- government agencies
- financial institutions
Overall, pension plan administrators play a prominent role in helping companies properly budget for contributing to employee’s retirement plans. Administrators plan, invest, control, and distribute corporate funds to ensure qualified personnel have access to their benefits. This rewarding career bridges from finance into human resources to make certain pension plans comply with the latest federal regulations. If you become a pension plan administrator, you’ll utilize your business skills to help employees accumulate assets for financial health in late adulthood.
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