Our Insights

Strong administration is essential to the delivery of members’ benefits and the provision of best-in-class pensions. It is the backbone of our pensions system. But it’s often the area that suffers from under-investment.

The defined benefit sector administers pensions on behalf of around 10 million people and well over a trillion in assets. So small mistakes can have huge consequences, not just for schemes, not just for members, but for trust and confidence in the whole pensions system. 

Strong administration is integral to effective scheme management and member satisfaction.

It is important that the correct benefits are paid to the correct beneficiary at the right time and members are communicated to in a clear, concise and helpful way. Getting the basics right can massively enhance the scheme members’ views of their pension and the sponsoring employer.

But excellent administration is not just about managing risk, keeping good records and getting the basics right. It is integral to effective management of the scheme and member satisfaction.

Increasing expectations

In the digital age, member expectations are increasing, and pensions administration has typically lagged behind the rest of the financial services industry. Investment in technology is an essential foundation for good administration.

We need to move away from the sticking plaster approach of the past, patching up systems to last one more year and implementing manual workarounds. 

We need systems to deliver efficiency, and accuracy, through automation.

Integrating technology

With modern technology underpinned by clean data, it’s possible to automate not just the more mundane tasks, but even many of the more complex processes – if you can calculate it in a spreadsheet, or define the process in logical data driven steps, you can automate it!

Investment in technology goes beyond just more efficient administration. 

Automation frees up valuable resources for the administration teams to add real value in ways that only a human can – providing compassion to a bereaved spouse at a difficult time, talking through a member’s retirement quote so they can fully understand their options or calling a member to make sure they have considered all the risks before transferring out their valuable DB benefits.

Bring this all together and you can quickly see how this is a real investment in the future of scheme members, leading to a better all round experience and better member outcomes.

In summary, investing in modern technology is not a nice to have. It is an essential prerequisite for strong administration, good customer service and a great member experience. And that is something that trustees of all defined benefit schemes should be striving for.