Professional Pensions December 2009
In the recent Professional Pensions administration survey only 54.1% of respondents had a totally 'open and engaged' relationship with their administrator. What do you believe are the key factors that contribute to achieving this kind of relationship?
From our experience the key factors to establishing a sustainable relationship between client and supplier are an understanding of the clients business, appreciation of their culture, regular dialogue, openness and honesty.
Clearly any relationship, regardless of its nature, takes time and effort to develop and be effective and there is no magic formula for instant success. Understanding the culture will provide an insight into the client’s expectation of suppliers. Ongoing regular communication and keeping the client fully informed with both good and bad news will ensure that an open and honest relationship is established to the benefit of all parties going forward.
There is an increasing trend for third party administrators to offer member surveys as an important measure of quality. In your experience are surveys also an effective mechanism for obtaining feedback from clients and trustees and what other approaches do you think are helpful in obtaining this information?
Surveys are an effective mechanism, but should be recognised as only one way of obtaining direct feedback of the members’ experience. All feedback should then be included as part of the regular stewardship reporting process to the Trustees supported by the appropriate commentary and any resulting actions.
In addition feedback directly received from the client and Trustee board either in formal or informal discussions combined with a regular strategic review provide the administrator with valuable and balanced information as to how they are perceived by their customers.
The Professional Pensions survey also highlighted 'Expertise' as the key reason why schemes outsource, closely followed by cost. In a changing market with increasing cost pressures what changes do you believe administration providers are making or need to make to respond to these dual objectives?
Clearly there is a very strong argument to support the statement as both breadth and depth of pensions knowledge will exist within a TPA. As the automation of administration continues to gather momentum and some organisations look to offshore processes the obvious impact is that administration staff can become reliant on the system output and therefore become less knowledgeable on the complexities of the scheme being administered. There therefore needs to be a clear focus on the level of training provided to administrators to ensure that they don’t loose that valuable knowledge. The ideal solution is therefore a combination of automation and manual activity which will ensure a sound knowledge of the scheme whilst obtaining the cost benefits that automation brings.
The member experience continues to be a key determinant of service quality and the focus of continual improvement. The introduction of personal accounts may prove to be a catalyst for change in the interaction with members. How do you see the communication with members changing, what benefits will it deliver to them and to what extent do you think personal accounts will set a benchmark in member communication?
The introduction of personal accounts will necessitate increased liaison between the member and their HR and Payroll departments as pensions will become an inherent part of the recruitment process. This will therefore require increased communication during an already stressful life event. Similarly, these areas of an organisation will need to engage more with the administrator on a day to day basis than they would perhaps currently expect.
Whilst the introduction of personal accounts has been delayed and the decision taken to roll these out as a ‘soft launch’, the sooner administrators and employers seek to engage with members the better, so that the introduction from an administrative perspective is as easy smooth and seamless as possible for all parties.
by Daniel Jacobson
Client Manager