The Royal Mail has been doing pension administration for the past 50 years. It is perhaps this depth of experience that helped it pick up the prize for Best Administration at the 2014 Pension Scheme of the Year Awards. Still, having a committed and dedicated team is at the core of its success, pension operations manager Mike Hitchins (pictured) explains.
"There are a lot of good administrators out there doing great work, so it is reassuring to know that people think we are right up there with the best of them," he says. "It's a real testament to the dedication of the entire team and everything they do to deliver a great service, day in day out."
The FTSE 100 scheme helps to ensure its staff remains high quality through training, engagement and recognition. Hitchins adds: "Ultimately, they are the ones that deliver the great service they do, whatever is thrown at them. They are great people and I can't speak highly enough about them."
The postal service has two schemes; the Royal Mail Pension Plan, established in 1999, and the Royal Mail Statutory Pension Scheme, launched in 2012 and administered on behalf of the government. Hitchins says: "As well as the additional workload this new scheme brings, this has also introduced a great deal more complexity to the existing arrangement as the changes need to be seamless to members. In essence, although there are two schemes we must give the illusion that there is only one."
Among the most significant reforms over the last half century was the Post Office Act in 1969. This turned the service from a department of state into a public corporation. In 1971 the Post Office Staff Superannuation Scheme was established, and nine years later BT and the Post Office split to become separate companies. There was another division in 2012 when the Post Office and Royal Mail parted ways. Hitchins says 2013 marked one of its best years in terms of performance.
"We exceeded all our targets. We also received just nine formal complaints that were upheld," he says. Although "no complaint is acceptable" Hitchins points out this equates to less than 0.0004% of all cases it handled last year. He adds: "We achieved this against a year of real challenge."
This occurred to the backdrop of HM Revenue & Customs mandatory move to RTI (real time information). This had to cover all information across the postal service's 187,000 records at a time when it was updating its IT network. The scheme also underwent other reforms that affected the definition and revaluation of pensionable pay for every active member. Hitchins highlights external challenges like the Cypriot banking crisis and the Equitable Life payment scheme too.
Despite these headwinds, the Royal Mail scheme was one of the first administrators to gain accreditation from the Pensions Administration Standards Association (PASA). Hitchins says: "I think we'd all agree that pensions are important to our members. It is important that we do what we can to reassure people that we are very committed to what we do, and to doing it well. PASA accreditation is one small way that we, as administrators, can show we take our responsibilities seriously. It's something I'm passionate about."
Hitchins describes the current times as "turbulent" and says pensions are no exception to this. He adds: "The rate, pace and complexity of change we all face in the industry just keeps on increasing, as do the demands placed on us. So I guess the main challenge that we have faced and continue to face is pretty much what all administrators face - how to keep on delivering a great service?"
In an effort to keep pace with both external and internal influences, the scheme refined its measurement and reporting framework in collaboration with its clients. This helps it to proactively progress its service offering and associated targets, and measure performance against these, Hitchins explains.
He adds: "We also developed our own improvement methodology based on our experiences of lean six sigma and WCM [world class manufacturing]. The combination of effective targeting, coupled with our innovative improvement approach, has enabled us to continually evolve, and to continually deliver high levels of service."
So how does an award winning administrator maintain its high standards - an in-house philosophy perhaps? "We don't have a vision or mission statement," Hitchins says. "But we do have a strong customer-focused service improvement culture. Our director, Dermot Toberty, would sum it up in one word: PRIDE." That is; professional, reliable, interested, determined and enthusiastic.
Hitchins' final words for other pension administrators are to keep moving forward and not be dragged down by whatever chaos the sector faces. He says: "As administrators our aim is to provide the best possible service to our clients and members alike. We live in turbulent times and to respond effectively you need to constantly evolve. If you stand still you will get left behind."
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