Changing your pension administrator is a big deal. Let’s face it, most trustees are at least a little resistant to change given the complexity and perceived risk involved. Even with meticulous planning and research, plenty of headaches await should you fail to get it right.
With the origin of most provider changes stemming from member discontentment, the profile of these transitions will already be high making the pressure to achieve a smooth and seamless transition all the more critical. So, how do you ensure a smooth transition with uninterrupted service for your members (and fewer sleepless nights for you)? Here are five top tips for a successful move.
1. Agree on exit costs and timescales with your current administrator
First and foremost, you need to make sure that everyone’s on the same page. Your existing administrator will hardly jump with joy at the prospect of losing your business, so expect some gritty negotiation. At this early stage, many an issue will arise to throw a spanner in the works of your seamless move. But you can avoid unnecessary surprises by being clear from the outset.
Your primary goal here is to ensure that the initial transfer of scheme documentation and information is conducted promptly to avoid delays to member services. Many unscrupulous providers will attempt to charge disproportionately high exit fees so do your preparation and make sure you lock down exit charges through your service agreement in advance. If you’re not able to do this, absorb the cost and move on if you want a quick start to the project.
2. Get steering committee representation and arrange meetings
The very word “committee” may send a shiver down your spine when it comes to making decisions or running a project, but a broad representation of key stakeholders will pay dividends. Steering committee members need to have the authority to escalate matters and leverage relationships with the transferring administrator, trustees or the sponsoring employer to ensure the aims of the project are met.
Plan for timely meetings and seek steering committee representation from the start of the project. Members should be prepared and willing to contribute to the process either from an oversight and assurance position or through taking directive action with suppliers and contacts.
3. Define the project drivers
Things won’t go perfectly, that’s a simple fact, so it’s essential to define the project drivers from the start. Your project manager needs to understand where there is and isn’t room for negotiation so that they can examine all options and make sensible proposals to the steering committee. This is a conversation that should be held at the beginning of the project as part of the initiation process - and then revisited at each significant update.
4. Establish cooperation between administrators
While this might sound somewhat utopian, the ideal way to foster a smooth transition is by establishing an effective positive working relationship between cedeing and receiving administrator. If you’ve successfully negotiated the exit costs and timelines with the incumbent, this will be easier to do. It’s particularly important to establish rights and access to areas of contention such as intellectual property claims on calculations, methodology and documentation.
State cooperation and access to materials requirements in your exit terms or, at the very least, have an early discussion with your current provider to confirm their agreement to (or conditions for) releasing information. Association guidelines as well as regulation on these matters aren’t directive and are often not adhered to by all administrators. So it’s up to the parties concerned to negotiate the range of materials that will be transferred automatically to your new administrator.
5. Ensure your project manager is on the case
Three words for you: documentation, documentation, documentation. Get your project manager to arrange meetings - and issue meeting packs ahead of time. Ensure full project management documentation, and governance structures are set up at the start and maintained throughout the project, as well as being clearly reported on at meetings. Your steering committee needs absolute trust that your project manager is acting in their best interests, as their eyes and ears, and will bring all appropriate matters to their attention.
Agree on exit terms, encourage participation between all parties and keep your project drivers in mind.