Professional Pensions Admin Panel May 2010
Members of pension schemes are increasingly being asked to understand complex pensions issues and make important decisions about their retirement provision. Do you believe enough information is given to members, particularly as they transition into retirement, and what more do you believe third party administrators could do to help with this?
There is a fine line between communicating with the member and communicating at them. The challenge lies in providing the member, who may well have some pension knowledge, with the information they require to make the relevant decisions, and adhering to legislative requirements, but communicating these in a clear and concise manner without being patronising to the recipient.
Given the increase in retirees with a variety of pension provisions from a number of different sources good communication is clearly key. It is imperative that information provided to members remains relevant, concise, informative and timely and at such a vital time there is an appropriate process in place to provide the relevant information to them in order that they can make an informed decision.
In your experience, has the recession made schemes less likely to fund enhancements to their service to members or investment in the quality of their data? What are you doing to help trustees and plan sponsors in these situations and is there more that could or should be done?
Whilst some schemes may have initially looked to go down this route, from our experience the increased regulatory focus on data quality and the move towards compulsion on this has resulted in trustees looking at testing and subsequently working to improve the quality of their data, if necessary. In addition, members are increasingly aware of the risks attached to pension arrangements in the current climate and are therefore asking more questions of the administrator and seeking more rapid response than in the past.
It is key that all parties to work together to meet their individual requirements and the administrator taking a proactive approach and from our part sharing our experiences with all of our clients therefore benefiting everyone.
The Raising Standards in Pensions Administration (RSPA) has recently started consulting on its future. In your opinion, what direction do you feel this group should take and what would you see as their priorities in the future?
MNPA have always been a key supporter of the initiative and we continue to enthusiastically support the role of RSPA. Administration has historically been seen as the poor relations of pensions with a far lower profile than their contribution warrants.
RSPA is now recognised across the whole pensions industry and can be a major influence on the future direction by providing practical proposals with an administration bias in relation to the forthcoming legislative changes, as the burden upon both employers and administrators increases.
Using 2012 as a launch pad could, if handled correctly, deal with both of these issues by showing the benefits of good administration and in turn lend reassurance to trustees sponsoring employers and members.
2012 is likely to see a shift in the services provided to job holders and scheme members. How do you think expectations, in terms of service, might change and what do you believe third party administrators will need to change their services to respond to the needs of job holders, members and scheme sponsors?
With much of the focus being on the provision of DC benefits, the speed of response, provision of real time fund information and turnaround times in general will be of even greater focus than they are now. As more and more employees are impacted by the legislative changes, the employers need to be aware of the increased administrative and record keeping burden of auto-enrolment and opt-out, together with the enhanced levels of communication that will be required to ensure that these run smoothly.
The administrator must be proactive and be prepared to deal with the increased number of queries this will lead to and also be ready to educate the employer and guide them through the implications of this change.
by Daniel Jacobson
Client Manager