UK - Outdated pension administration systems will be an increasing burden for companies switching to defined contribution schemes, a survey by software provider CTC shows.
The software specialist believes the answer lies in giving members greater access to their pension fund details over the Internet.
CTC managing director Nigel Chambers said: “As pressure mounts to switch to hybrid and DC-based schemes, existing legacy-based systems will come under increased burden and it is feasible that Internet architecture will provide a realistic solution to the issue.”
The software provider’s Survey of Pension Schemes Online Services 2002 also found that while 48% of all scheme members could access information online, the pension funds providing this access were not using to Internet to its full potential.
DC schemes are usually more advanced, but CTC found that fewer than 18% could provide online benefit statements and only 21% could provide Internet-based pension projections.
While so few schemes were using the Internet for member communications, many thought that it was important to provide members with projection tools – tools that are ideally suited to the Internet.
Chambers added: “An overwhelming amount of respondents with both DB and DC schemes felt that a facility to calculate the effect of changing retirement age would be constructive for their members.”
CTC interviewed around 150 pension schemes – 41% of its sample were DC schemes with the remainder being DB or hybrid.
Partner Insight: Members' evolving needs and expectations are driving changes in scheme administration. As the pensions landscape inevitably continues to change, how will your scheme's approach need to develop to keep pace?
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