Company pension schemes represent a major expenditure for employers and, rightly, they expect a return on their investment. Employers offer schemes to help recruit and retain people who add value to their business. Members should be confident their retirement account is secure, professionally managed and that their benefits are paid promptly. The pension scheme should not distract the senior management from focusing on running their business – and that is where service comes into the equation.
The continued sponsorship by employers is vital for the future of private pensions, whether an occupational or contract-based scheme. However, there is a lot of pressure on businesses to manage costs in the current economic climate. The pensions industry must do all it can to ensure retirement savings are not cut back.
Excellent service demands:
• Stable, secure and robust back-office computer systems,
• Skilled people with the right attitude to deliver good service, and
• An ability to continuously innovate using technology to enhance the service processes.
Significant long-term investment is essential to understand and take advantage of the right technology innovations as well as the ever-changing legislation and regulations, which affects state and private pensions. A stable and robust systems platform is fundamental.
• Integrated data structures and comprehensive security and audit processes
• The capacity to process millions of automated transactions each day
• Secure accounting systems to balance new money receipts and unit purchases.
These may appear straightforward functions for any pension provider. However, it demands substantial expertise to manage a growing portfolio of business whilst regularly accommodating new functionality to handle new legislation rules and products. Each and every change to systems and processes undergo rigorous testing before implementation.
To do this a pension provider really needs to understand the dynamics of this market. Pensions technology has to be ingrained in the culture and ethos of the business. All systems projects have to have twin objectives of raising the service bar whilst reducing unit-processing costs. Administering over 13,000 occupational and contract-based group schemes represents a proven track record.
Utilising technological innovations is crucial. Friends Provident was the first pension provider to use the internet to fully automate the capture of personnel and payroll records. Data is transmitted via the web and automatically populates member data records. Monthly, or weekly, contribution data is remitted over the web.
Transactions are reconciled, payment collected automatically from the client bank account and units are purchased and recorded in each member’s account.
The end-to-end process avoids duplicating and rekeying data and hence transcription errors. The system is fast, accurate and reliable.
The internet also allows advisers, employers and scheme members to view scheme data, and run a range of activities, wherever they are 24 hours a day, every day of the week.
The public has genuine concerns about the security of personal data, not helped by the poor management of several government departments. Pension providers must set the highest standards to reassure customers that their data is safe and secure. In summary, excellent service delivery is crucial. All dealings with the provider should be a hassle free experience for the employer and the members.