Making systems more open
UK pension funds are looking to technology to help them improve efficiency in a variety of areas of their operations, and to make use of the internet and web technology to give their members better access to information on their pensions. The latest generation of pension administration systems offer sophisticated workflow management, and the possibility of distributing member information online.
Reading-based international directories business Yell has recently completed a project to make the benefit statements of its pension fund members available on the web. “Yell has a philosophy of reducing reliance on paper in internal office communications, and electronic delivery of information is cleaner and more efficient,” says Simon Gale, head of human resources at Yell. “Also, our people are very used to information being in an electronic environment, and expect to get information this way.”
Yell hired London-based actuarial consultancy Punter Southall to build the website for the delivery of the benefits information. Security was a major concern, and although Yell has its own website on which is posts general information about pensions benefits, the company contracted with Punter Southall to host the benefits database on a secure server at its site. Members are issued with unique passwords and user numbers to access their data.
Yell worked with Punter Southall to create the database for the site. Because Punter Southall already provided the company with a pensions administration service, it held all the contributions and latest salary details for members. Yell provided email contact details for each member, plus other details. “Together we created this large database, and when we agreed it was accurate we uploaded it to the site,” says Gale. It will be updated annually, at which time members will be notified by email. All historical information will remain available online at all times. In the near future, the company plans to extend the website with information about other company benefits.
“With the heightened awareness about pensions among people in the UK today, Yell wants to be able to share pension_fund information with its members as quickly and efficiently as possible, and this is an important initiative in that area,” says Gale.
Surrey-based security and fire protection services company Chubb is currently installing a new pension administration system that will also allow it to give members access to their pension information online. However, this was not the main criterion in choosing the system, nor is it the priority in its implementation. Chubb acquired the system, called Compendia and supplied by West Sussex-based Claybrook, primarily to enable it to bring in-house a defined contribution scheme that was being administered by an insurance company in order to reduce costs. But because Compendia is built using modern web-based technology it offers a number of additional benefits, such as the fact that the element of the system that sits on the 15 users’ desktop machines can be distributed via a network from a central IT site, rather than an IT technician having to visit each machine individually to load the software. The pension fund has no dedicated IT staff, but makes use of Chubb’s central IT facilities for technology support. And because access to the system is via the web, it gives users more flexibility in how and where they work.
“The browser-based technology will provide the platform for systems facilities to be distributed over the internet, not only to members, trustees and HR and payroll, but also to administrators, thus opening up the possibility of working off site and at home,” says Mark Bellm, group pensions manager at Chubb. At the moment, if HR wants a quote on a pension for an employee it has to make a request to the pensions department, which performs the calculation. With the new system, HR will be able to get a quotation immediately online, as well as to perform what-if calculations.
Up till now, there has been no pressure on Chubb from trustees or members to provide information online, says Bellm. But this may be because most of its pension services have been centred around defined benefits schemes, and the demand for information may be different with defined contribution schemes, he says.
Having the technology to support web-based working and allowing member access to their data is now a key challenge in providing third-party administration services, says Brendan Mooney, pensions administration practice manager at London-based actuarial consultancy and third-party administrator Hymans Robertson. The company, which has 65 third-party administration clients, is in the process of implementing the Universal Pensions Management (UPM) system from Berkshire-based Comino Group. “The_system provides up-to-date communication capabilities which will enable improved access for our schemes’ members and wider opportunities to improve member communication,” says Mooney.
Hymans Robertson began reviewing its administration software in 2002, and spent 2003 investigating the systems available in the market, finally narrowing the choice to a short list of three, on which it conducted feasibility studies. “The studies completed took the form of workshops which reviewed key aspects of each system, for example workflow processes, document image processing, import and export of data, calculation building and so forth,” says Mooney. The company eventually decided that the sophisticated workflow and document management procedures of the UPM system would best enable it to meet its goals of improving its operational procedures and risk management processes that support its services to clients.
One issue that Hymans Robertson has paid particular attention to, and which challenges pension funds and their services suppliers in general, is data. “Data management and integrity continues to be a core issue and will always need to be addressed if good quality, accurate services are to be delivered,” says Mooney. Ultimately, a third party administrator service, or in-house pensions administration system, will only provide the quality of output required if it is supplied with accurate data in a consistent format and in a timely way. “Administration service providers must take the lead with this, and be proactive to assist clients to develop systems and processes to enable them to deliver in this area,” says Mooney.
The latest generation of administration systems provide more powerful data validation tools to monitor the quality and completeness of data before it is accepted and loaded into the system. The UPM, for example, applies strict workflow control procedures to all data changes and updates of membership records. It also has integrated document image processing for the storing and handling of paper based records
With its new system, Hymans Robertson will be able to offer member access to the schemes it administers. However, not all pension funds see this as an urgent necessity given the changes underway in the pensions industry and the requirements of recent legislation. The fund of a large UK pharmaceutical company, which did not wish to be identified, says that although it already has a web site on which it provides its members with general information about its scheme, it is not planning to extend this to individual member access of their records in the near future. “We have far too many other pressing matters on our plate to attend to,” said the pension scheme manager.