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?
We have looked already at the increases in member enquiry and request volumes and their impact on the ways schemes approach administration. But these are not the only trends that trustees and sponsors need to be aware of.
People working longer:
The implications of people retiring later have been talked about a lot - potentially affecting the jobs market and the nature of work, and with knock-on effects for insured benefits and pension payments.
Then there are changes in communication and requirements around speed of service. In today's ‘instant' culture, letters and hand-filled forms are no longer quick enough to satisfy member expectations.
Email, text messages, social media and web-based communications are now the norm. In future, the growth in AI and so-called ‘robo-advice' may see more automated solutions to member queries. This adoption of new technology and the growth in communication channels reflects an increased interest from members in their pension options, with the Pensions Freedoms driving renewed engagement as a result of the choices members can now make.
Growing interest in financial wellbeing:
It also ties in with a wider trend in financial wellbeing; Aon's 2018 EMEA Health Survey and Financial Wellbeing Survey both show that financial wellness is a key issue and growing priority for employees and employers. One of the ways this manifests itself is in a member population that is more interested and active in their pension choices within the context of their wider financial and savings situation.
Taking a proactive approach to change:
What can a trustee or sponsor do to respond to these changes? First, work closely with their administrator to explore potential new approaches and solutions to the challenges they face. The pensions industry is ever-evolving, and a good administrator will use lessons learned and solutions developed in response to past changes, using their experience to inform their approach to the future.
They will use this knowledge to ensure they - and their clients - are on the front foot when it comes to this ever-changing landscape. There is no shortage of potential solutions, technological or otherwise, to the administration challenges you face. Find out which solutions fit with your approach and priorities, and whether the provider you work with, or are considering, has adopted them.
Early engagement with your admin team on the issues you face will help you to identify the solutions that work best for you. Similarly, if your administrators have a close working relationship with your actuary and investment advisers, either as part of the same firm or as a close-knit team across different firms, they can be aware of legislative changes and other initiatives that will impact members, and collaborate on solutions and approaches to address them.
Click here to read the Guide in full and Aon's core tips to manage the changing pensions landscape.