Garry Wake comments on how Freedom and Choice in pensions has affected the administration sector.
It is now six months since Freedom and Choice in pensions came into force. It's therefore a good time to take stock and consider the impact these changes have had on the businesses and people at the frontline of pensions administration.
Undoubtedly the changes are a good thing. As the title suggests, members now have more freedom and choice about how and when they receive their benefits. As a result they have become more engaged with pensions which has to be seen as positive.
However, members now face more decisions than ever before and they need help to make informed choices. I am not talking about guidance or advice; we rightly need to leave that to those who are suitably qualified and regulated. Still, as administrators, we have a duty to provide effective support to members as we are often their first port of call.
As a back-drop to the changes, all administrators have had to work hard to ensure that systems, processes and automation are up-to-speed. There was a long list of things to do, with little time to do them. All of this needed to be achieved whilst continuing to support clients with various data cleanse, de-risking and GMP reconciliation projects. This isn't a moan; it's just the reality of the last 12 months.
Nevertheless, the dust has just about settled, at least for now, and out of the haze have come two clear areas in which administration providers need to 'raise their game'.
The first is the need to provide tools and information to help members understand their options and make informed choices. This is no easy challenge when you consider that we communicate with members by letter, email, phone, and online.
Online communications are increasingly important but the pensions industry has generally been slow to respond. Despite all generations now being comfortable with handling their personal affairs online, the vast majority of occupational schemes still don't have a member website, and many of those that do only provide static information. So if Freedom and Choice does not stir some life into providing improved online information, tools and modelling facilities, we will have failed.
We also have to ensure that our people are up to the challenge. As we all know, pensions are increasingly complex. Whilst technology can provide part of the answer, there is a growing argument to say that this must be complemented by giving members direct access to skilled and experienced staff who fully understand the scheme, UK legislation and can support and respond to their needs. I suspect that being routed through impersonal technology or speaking to people in a call centre type environment may have had its day.
My view is that members deserve better than they've had in the past in these two key areas. My hope is that we respond as an industry to these needs. Having the right mix of technology and expert people is, in my opinion at least, the only way to move forwards.
Garry Wake, Managing Director, Trafalgar House Pensions Administration
http://thpa.co.uk/
