Pensions administration in 2021: reflecting and looking ahead
07 Jan 2021
Now that my Christmas tree has come down and 2021 has begun, I’ve been reflecting on last year and at the same time considering what the next twelve months will look like. It’s odd to think that when I did this at the start of 2020, I was blissfully unaware of what would unfold! And yet, even though the world changed and plans were disrupted on almost every level, 2020 pushed the envelope for pensions administration. We coped. The show stayed on the road. Critically, vulnerable members, some unable to even leave their home, continued to receive their pension payments. Huge teams of employees became homeworkers and new applications continued to be processed. There is plenty of success to reflect upon in terms of how we adapted as an industry.
We’ll draw on that success in 2021 to accelerate the pace of pension digitalisation, particularly by understanding how members’ appetite for digital has grown. Unsurprisingly, after nine months of essentially living online, a quarter of members who currently don’t engage digitally with their pension now feel more comfortable doing so.
Time for new goals
So what should our shared goals for pension administration in 2021 look like?
First, we have to deliver a web-based service that is easy and intuitive. It’s easy to underestimate the value of a site that ‘just works’, where we can find what we need to do quickly and execute seamlessly (we’ve all had our fair share of huffy clicks when a site didn’t deliver this year). We have to get our house in order for the small things as well as the big ones. It should be as easy to change an address as it is to retire online – there’s enough tech out there to make each event equally safe.
Secondly, we have to get more members to visit our sites. That’s about regular communication, contacting members at the right times in their employment and lifestyle journeys to nudge visits. We also have to learn from DC sites and use that experience to cross-pollinate the DB schemes where traditionally members are less engaged.
Finally, we need to bring systems together. Why can’t a DC scheme talk to a DB scheme, so that a member can have a complete picture of how all their pensions work together? That means fixing the underlying data, the stuff that’s still sitting in a filing cabinet from 30 years ago, fitting it into the bigger picture, with systems that actually talk to each other.
Simple is always best
To reach our goals, simplicity has to be our motto. It’s important to remember that digitalisation in itself doesn’t actually bring that simplicity – complexity digitalised is still complex. We have to put in the work. But events have shown we are more than capable of moving mountains to deliver for our members. That’s the energy and spirit we now need to tap into as we start 2021, and when life (eventually) begins to return to something a little bit more like normal.