Pensions management consulting

Much of our work requires gaining a thorough understanding of the issues our clients are facing. We therefore undertake various quality assessments at the outset of our assignments, which include the following:

Current State Assessment

Given the ever-increasing pace of change in the pensions industry and the ongoing evolution of the underlying services to deliver the administration, it is not surprising that few Trustees truly understand all the components, stakeholders / providers, processes or systems that are involved / deployed to provide their members with the day-to-day services they rely on. Demystifying the existing operating model, through a near forensic examination and assessment process, which identified existing strengths and weaknesses is often critical in making sustainable and tangible improvements in the overall service. Our Current State Assessments allow Trustees, often for the first time, to have a complete and transparent understanding of such delivery models.

Data: PASS

One of the basic building blocks of good administration is clean and complete data. Ensuring compliance with the Pensions Regulator’s requirements on Record Keeping and maintaining a high level of data quality will support the delivery of a quality administration service. However, we have found that a lack of well-considered tests reduces their value in measuring the data that supports the effective administration of pension schemes.

“Data: PASS”, part of our digital toolkit, has been developed to cater for both common and Scheme-Specific data reviews and can easily be adapted to meet our clients’ needs and report accurate scores. Where our clients are unsure as to whether their Scheme-Specific tests are tailored enough to their own scheme design, we also offer an independent review of the existing tests being run against the nuances of the scheme.

Cyber Threats

Pension schemes are a prime target for cyber attacks. We leverage the knowledge of our cyber experts within PwC to help Trustees and sponsoring employers understand and manage the threats their scheme faces. Our Game of Threats scenario planning tool can help identify weaknesses and potential responses, and we can even simulate a cyberattack to test the defences /readiness of a scheme’s advisers or provider.

Post Implementation or Transition Review

Where a project has been completed, Trustees and sponsoring employers understand that it is good practice to carry out a post project review, particularly those where an issue has been identified as well as those which have gone over time or budget. We’ve worked with many Trustees and sponsoring employers to implement fixes and identify lessons so that future initiatives run more smoothly.

We also have extensive experience carrying out reviews of complex DC transitions, including Master Trust, to provide comfort that records and assets have been transitioned as expected.

Distressed Projects

Even with the best of intentions and planning, factors such as staff turnover, lack of skilled resource or other dependencies can result in a distressed project that is at risk of not meeting its objectives. We have worked with many Trustees and sponsoring employers to rescue failing projects, rapidly deploying our experts to identify the underlying problems and to produce a recovery plan.

We understand that good governance demands Trustees and sponsoring employer ensure third party providers are offering value for money. However, this can be a challenge in the UK as it requires approaching the provider market for comparable costs. We overcome this by developing and maintaining a large database (within our Litmus system) of costs and other factual data points, e.g. Service Level Agreements (SLAs).

Litmus gives us the ability to instantly interrogate this extensive dataset to provide insight into what other similar sized schemes are being charged by both the incumbent and other 3rd partly providers.

The Litmus database has been built up over many years from our regular interaction with the market, meetings with providers and helping clients run multiple procurement exercises which range from small bundled services to large scale public procurements covering the full range of services.

There are still too many instances where the basic building blocks of good administration (namely good quality and complete data, coupled with a comprehensive and accurate calculation suite) are inadequate / poorly maintained. This seriously constrains the Trustees or sponsoring employer’s ability to deliver a member centric service, with a digital experience at its heart. To overcome this, we help our clients to design Target Operating Models (TOMs). Our TOMs cover all components of the delivery model, along with a plan or journey to deliver the required changes. Once implemented it is possible to demonstrate the improvements in member satisfaction and efficiency as well as a reduction in costs and risks.

It’s not unusual for pension schemes to have limited visibility of their membership demographic, the way members interact with the scheme and what impact this ‘channel behaviour’ has from a cost perspective. Historically, technology has been a major barrier for Trustees to visualise their data in a meaningful way, gather insight at a granular level of detail or consider how ‘default’ member behaviour is impacting on cost.

Our predictive analytics tool is a sophisticated visualisation modeller that helps develop a powerful insight into scheme membership demographics and behaviours to help project future trends that impact on costs and can help our clients realise the benefits of:

• Engagement strategies to support channel shift to a self-service model;
• Setting appropriate / realistic transaction thresholds in light of pension freedoms legislation;
• Engaging with their administrator over the scope and timetable of introducing self-service functionality; and
• Having fully informed commercial conversations during contract negotiation and renewal.

The decision to review and then change administrator or other professional adviser is one of the most important and difficult decisions faced by Trustees, even where their incumbent provider has performed poorly for a period of time.

Whatever the reason(s), we can offer Trustees support throughout the provider selection process. Calling on our extensive knowledge of the market to help put together a long and short list of appropriate providers. Working closely with our clients, we develop requests for proposals and deploy our robust methodology for assessing responses that meet our clients’ requirements. Our services in this area cover the selection of:

• Administrator
• Pensions Administration Software
• Scheme Actuary
• Legal Adviser
• Fiduciary Manager
• Professional Trustee
• Trustee Secretariat
• Mastertrust
• Investment Adviser

We have the experience and deep subject matter expertise to help successfully implement change for pension funds. Whether this is due to a change of administration supplier, the administration software platform or the broader suite of tools used to support the operation, we have tried and tested methodologies to support our clients through complex operational change. As well as providing full programme and project management support, our specialisms cover:

• Data Migration – our eight-phase ‘model’ approach provides full support through the process of moving data between systems, giving clients a high degree of comfort around the accuracy of the migration and the identification and mitigation of risk throughout the process.
• Calculation Development – our seven-phase ‘model’ approach guides and supports clients through the full cycle of specification, development, testing and deployment in to the Live environment. of benefit calculations.
• Testing – we provide high quality Test Management services including development of a detailed Test Strategy and Test Plan, covering all workstreams involved in delivering the change, leading in day-to-day support for the execution of the strategy. We take a robust and rigorous approach to defect management and resolving issues, providing detailed and insightful management information so that all key stakeholders have a clear understanding of current risks and issues, how these are being resolved and the readiness of the business for Go Live.
• Knowledge Management – we regularly support our clients in developing standard operating procedures, using these to develop training materials and upskilling operations staff. This is a critical process for ensuring the business is prepared for change and can function effectively from Go Live.

Whether at the start of a project or ‘in flight’, we use our understanding of both pensions change and project management methodology to provide dedicated programme and project management support to our clients.

We use our own project management methodology, which is based on Prince2 but adapted to fit each client's specific requirements. This has been developed by PwC to provide a practical but rigorous approach to complex programme and project management.