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The
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The
road ahead The pensions market has seen unprecedented levels of change in the last few years. This has largely been driven by changes in legislation, a climate of low inflation that is driving employer attitudes, increasing government involvement and its desire to encourage private pension provision, demographic trends and, at long last, the desire to embrace the technology revolution. All of the above means that pension consumers are being re-educated with regard to pensions provision, making consumers more demanding for information to be immediate, personalised, and tailored. Few would disagree that traditional pensions providers find it challenging to provide even generic information within a reasonable time-scale, let alone on demand. This requirement is so challenging, that a completely new business model is required in order to secure the continuity and profitability of these businesses, utilising best-of-breed internet-based technology with re-educated resources and simplifying processes. Sadly, in too many cases administration is conducted on systems that are complex, have inefficient processes, and are far from user-friendly. The new model should encompass an element of self-service via the internet for members and contributing employers to handle the value added transactions. Processes such as changes of address, submission of renewal information or regular defined contribution information, the ability to switch investments, and the production of immediate illustrations are self-service capabilities now available. The growth of internet cafes and kiosks, interactive digital television and hand-held web enabled devices means that even those without PCs have access to the web. This rapidly changing pensions market, fuelled by a desire to create a leaner, more productive and cost effective business model, means that systems providers and consultants need to respond to these demands. Solution providers that have responded to clients’ needs by developing systems and services ahead of the game are now well positioned for the next wave of technology change. They are able to provide a truly people-centric web pension administration system that, uniquely, is not only accessible by members, but by sponsoring employers, trustees, IFAs, and consulting actuaries. Indeed, anyone who needs secure access to accurate, up-to-date information can have it available 24 hours a day, seven days a week. Not only that, but they should provide the associated support, training and resources to ensure the system is used efficiently to provide an optimum business model. Depending
on the systems provider, by using the software now available on
the market, and utilising the additional consultancy services on
offer, a pensions administration model can be delivered that will
not only increase members’ perceptions of benefits but may reduce
costs in excess of 25 per cent. All of this requires a fresh approach
to the way in which pensions affairs are conducted. Anyone intent
upon playing a part in this challenging new environment will need
to embrace innovation and unshackle old ideas, sever ties with legacy
methods and technology, and embrace new values and principles to
gain the best rewards for schemes and members. Malcolm Reynold is
the director of business development and strategy at Profund
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