Julie Walker highlights the importance of quality within pensions administration
If beauty is in the eye of the beholder, service quality is very much in the subjective experience of the consumer. Pension administration is no different. Our consumer pool, made up of employers, trustees, members, advisers and policy makers, may be more multi-layered and occasionally conflicted than the average energy provider’s for example but, essentially, we’re all aiming to provide specific services of a specific quality at a specific cost. How successfully we do that is the crux of the quality question.
As the PMI’s support partner in the area of pension administration, Barnett Waddingham has spent the last few months canvassing industry opinion on key issues in the quality debate and will be unveiling our results at the Pensions Age Autumn Conference on 6 September.
Divided opinions on quality
Our summer survey comes at a point where a number of initiatives are converging on the quality question, with PASA and the regulator both focused on administrative quality, the PPF striving towards administrative consistency and the always fluid administration market demanding more extensive and flexible approaches to quality measurement and management.
In the absence of objective measures majority opinion can occasionally substitute but, when it comes to service quality, that opinion can be surprisingly divided, influenced both by personal preference and corporate culture. When we think of quality do we think of gleaming white computer-filled rooms quietly spooling through endlessly accurate calculations or the more artisanal feel of master tailors deftly piecing together bespoke solutions? Does the industry need administrators who could confidently calculate GMP from first principles on the back of an envelope, or does a sustainable business model call for a nation of button pushers? What’s more important in quality management, people or processes?
Production line versus product?
In reality, quality is more likely to be the sum of its parts – pension schemes last a lifetime so quality management does need to be based on recruitment, retention and development programmes geared towards producing administration professionals capable of understanding and deconstructing errors and issues from half a lifetime ago.
On the other hand, the ‘back of the envelope’ approach isn’t a realistic model for business success so technology has to take the strain out of administration and room has to be made for a mass production approach that also somehow focusses on the individual. The delicate balance between people and processes is essential - the administration team has to deliver the same quality and service to 10,000 members and every member has to walk away feeling that he or she is the one member who matters most.
Although the industry isn’t particularly suited to a universal set of objective measures, as providers we do generally function under a range of metrics aimed at capturing performance and client satisfaction. Whether it’s SLAs, client and member surveys, complaint levels, client retention or provider reviews, we do (or should) constantly seek to gauge and rate our own performance using the best tools at our disposal.
As individual providers, our own corporate values and business philosophy may pull us strongly in one direction or another – towards the target-led ‘hard’ numbers of SLAs for example, or the less tangible member-focused approach of member interviews and surveys. What was particularly revealing in our survey results though, was how split industry opinion was in this area, with very strong biases emerging both for and against the corporate behaviours different approaches to quality measurement are assumed to encourage.
With initial results due to be published in early September and our autumn campaign taking a more detailed look at the individual components contributing to service quality, Barnett Waddingham are aiming to deliver a comprehensive picture of quality in the administration arena by asking the pension industry directly.
How individual providers are likely to respond is open to speculation but, with the tide of industry opinion pulling strongly for quality as the key driver in administration services, TPAs across the board may have some questions to answer on how well their own quality policies sit within that picture. Pension administration is a buyer’s market and the market is heavily influenced by the wider pension industry. Depending on where each provider places themselves on the quality spectrum, these results could come as a wake-up call, forcing us to review our own approach in the light of what the industry clearly values.
Written by Julie Walker, associate, Barnett Waddingham