Joe Anderson explores the possibilities of a technology take-over.

Will there ever be a time where technology and member self-service reach a point where a pensions administrator is simply not needed?

In my (nearly) 20 years in the industry, we've seen huge advances in technology, processes, automation and online solutions. All of these changes have, to some extent, lessened the need for the administrator to have detailed and intricate knowledge of the calculation or process they are performing.

For example, where it was once necessary to know how to calculate a GMP manually using pen and paper, we're long-since past the automated GMP calculation.

So, rather than asking whether today's administrators would be able to replicate the manual calculation, perhaps we should ask whether there is any need for them to have that level of knowledge when the result is available at the push of a button?

We've also seen improvement in the quality of data, which has led to scheme websites allowing members to manage their own personal data, access payslips and P60s online and run their own retirement and transfer value calculations.

The next natural step for defined benefit (DB) schemes is to allow members to transact online. Online investment switching has been commonplace for members of defined contribution (DC) schemes for many years.

The advent of auto-enrolment means joining online, where members log in to select contribution rates and investment choices, is a familiar process to many.

If we allow DB members to get a retirement quote online, why not let them choose to retire via the web? With online identity checks removing the need for original certificates to be posted and returned, are there any barriers that can't be overcome in making this a reality?

If you extend this to its logical conclusion then, alongside robo-advice for retirement choices, you can quite easily envisage an online-only service where members need no interaction with a 'real person' at all.

And yet,

For the majority of legacy DB schemes, there's still a long way to go before this can become a reality.

Part of what makes the pensions industry so challenging (and interesting!) is its history and complexity, and the same applies to the vast majority of pension schemes.

This, inevitably, means that it's simply not possible to automate every calculation for every scenario. And, although data issues have been greatly reduced, issues remain.

There is also a question of how comfortable Trustees are with allowing members to transact online and how far they are willing to take this. Although Trustees almost unanimously see online services as being beneficial to members, would they really be prepared to go 'online only' if the circumstances allowed?

In addition, not all older members are silver surfers (although a large proportion of them are) and not everyone has easy access to the internet.

The consequence is that for as long as there are DB schemes rich in complexity there will remain a need for skilled administrators who can appreciate the history of a scheme and turn complex rules and calculation bases into simple and understandable information for members.

So, whilst we should all continue to strive for data accuracy, automation and online tools which can help and educate members, this alone is not enough to provide a balanced and complete service to Trustees and members of DB schemes.

And, after all is said and done, sometimes we just want to be able to speak to someone who knows what they're talking about!

Written by Joe Anderson, Client Relationship Manager, Trafalgar House.