16 Mar The need for an excellent pension administrator in a modern pension plan
Modern pension plans offer participants insights and flexibility to tailor the plan to their personal situation. A sophisticated pension product with the right personal communication and customized choices is needed to achieve this. When sketching the ideal future-proof pension product, oftentimes the most important basic requirement is neglected: an excellent pension administrator and process chain. Legacy systems or inefficient processes are often barriers to members fully exploiting the real benefits of a modern DC pension plan. LifeSight acknowledges this and sets three core principles to ensure that members are well informed and encouraged to customize their retirement situation.
These principles are:
1. As much relevant data as already available
2. Making choices is simple
3. Fast processing
Relevant data available
Participants drop out if their data are incomplete or incorrect. In the past, the responsibility for correct information has been fully placed with the employer. LifeSight attempts to relieve this burden as much as possible and retrieves data from the source. There is a link to the Basic Registration of Persons (BRP) and other databases run by the local or national government. This means that LifeSight is informed of changes in marital status, address changes and disability of participants. Changes related to retirement, marriage/registered partnership, and death and disability are automatically processed.
Thanks to an interface with the National Institute for Consumer Spending, an indication of the required pension based on the participant’s personal data is shown in the dashboard of the member’s portal (MyLifeSight). This gives a member a retirement income goal based on his/her peers or a trigger to think about their personal retirement goal. In addition to state pension and pension at LifeSight, other pension provisions can be uploaded for the Dutch pension database (pensioenoverzicht.nl).
The data delivery via employers is limited to new employees, leavers, unpaid leave, salary and part-time changes. Simply submitted through LifeSight’s employers’ portal or via a direct interface with the payroll administration. A total retirement overview and Insight via MyLifeSight for members is thus achieved without much effort by the employee or the employer.
Making choices is actually simple
Insight about their pension situation enables people to make choices about their retirement. These choices are broader than investments: additional savings, voluntary insurances, desired retirement age, value transfer from other pension plans, etc. Choices need to be simple and clear. A form converted to a PDF on a website is not true ‘online support,’ according to LifeSight. Choices are submitted online through smart menus and wizards that help people step by step through the decision-making process.
If a person is engaged enough to actively manage his pension benefits it’s crucial that his information is up to date and changes are processed rapidly. This gives a member much needed insight in the new situation. People will become disengaged if a submitted change, for instance a voluntary death insurance, takes weeks to process.
LifeSight has an efficient administration platform for optimal performance based on the straight-through processing (STP) principle. STP at LifeSight means automated real-time processing within 15 minutes, but often within seconds.
In addition to fast and accurate data processing, LifeSight values transparency. Therefore, a participant is always able to find the history of all the changes in his portal, even changes that are made by third parties such as his employer.
Pensions are generally not the favorite topic of the average Dutchman. It is therefore vital that there are absolutely no barriers. An excellent pension administration is a basic condition to create real understanding and make managing a pension insightful, fast and easy. Clients were surprised by the fresh, quick and simple way they are enabled by LifeSight to have this insight and control. This is a compliment that we are very proud of.