In pursuit of great pensions administration
The question we get asked most often is unquestionably “are there any good Third Party Administrators (TPAs) out there?”, followed closely by “what does top quality pensions administration look like?”
To which we can respond positively – “yes, great pensions administration is out there!” With the correct expertise it is easy to define and there are some good quality offerings in the market. But there are plenty of cases where schemes are using a TPA which no longer ‘fits’ their requirements. Schemes maturing, TPA mergers and acquisitions, and other influencing factors often result in a mismatch of needs-to-service over time. Small schemes find themselves with big providers (the common tale of small fish in a big pond), or larger schemes find they have outgrown their TPA. There is clearly a need to continually monitor the service you’re getting and whether you still have the best provider.
But first, what does a great pensions administration service look like?
No noise from members
The adage ‘no news is good news’ has never applied more than in the context of pensions administration. While all is running smoothly and there is no cause for complaint or grumble, it’s safe to say, as a trustee or a company representative, if you are not receiving member phone calls, you probably have a good administration service in place.
Timeliness of response
Whilst time bound Service Level Agreements (SLAs) should not be the only measure of a quality service, they do have their place. Your TPA should be reporting their performance against the SLAs to you at least quarterly. We would expect to see 95%+ achievement of the SLA in a good administration service. That said, do not take a drop in service levels in one quarter as a measure of poor service. Work with your TPA to understand why service levels may have dropped. Sustained SLA performance below 95% should trigger some cause for concern.
How to move from good to great
Good service is one thing, but your members deserve great service. The next level of member experience. What should you look out for if you are after a truly great service?
Ask your TPA if they have a quality policy in place. A TPA that has quality embedded within their culture has high ‘right first-time rates’ and controls and measures beyond time-bound SLAs.
We usually find that TPAs with dedicated Quality Managers provide a superior standard of member experience.
The member experience
How customer-focussed is your TPA? Pension scheme members, or customers, expect to have a self-service experience like internet banking. As a minimum there should be on-line access to scheme information and personal data via a log-in. Exceptional service will include the ability to transact from the member portal or an app. We are seeing the best providers significantly reduce or eliminate the need for pages and pages of paper forms to be completed. Even identity verification can be carried out via apps – providing a hassle free member experience.
Relationship management and the administration team
A great service will come from a provider who considers themselves an extension to your team. We see the TPAs who provide the best service are those who take a true partnership approach with their schemes. They are engaged with the wider context of the scheme and the sponsor. They seek to understand any scheme or sponsor activity that may impact the membership, such as corporate transactions or restructures.
In a true partnership environment, you will have a named client relationship manager, and you will have named administration team contacts. It doesn’t necessarily mean a dedicated team, but you will certainly know who to contact, and be able to reach them.
As a minimum you should expect regular reporting and management information (MI) to be made available to you. The best providers will make online employer / trustee portals available to you to view MI whenever you want to. This could also include the ability to track case work progress.
What if it’s not a good service?
There is hope!
You may well be able to improve the service from your existing TPA. Potentially with a recovery plan, or through renegotiation of the service levels or contract terms.
But there is a wide TPA market out there. Visit our TPA league table to see the organisations available. You might decide that it’s time to understand what else is available for your scheme and carry out a review.
Look out for our future articles which will consider the pros and cons of market reviews and recovery plans.
We are always happy to chat about what we are seeing in the TPA market. Give Chris, Susan or Tina a call on 020 8213 5860 if you’d like to talk more about the great service you could be getting.