Staying in control through agility
Operational agility is a pension fund’s ability to respond in time to new circumstances and opportunities, while staying in control and making the most of the knowledge and capacity of external partners. In this context, outsourcing doesn’t mean handing off responsibility. It’s a deliberate choice to work with specialist partners and professional administration organisations.
That gives a fund access to up-to-date expertise, economies of scale and new solutions. Clear contractual agreements, ongoing monitoring and regular reviews safeguard the quality and continuity of the service. An agile pension fund stays firmly at the helm, although in practice that takes constant attention.
Developments in the administration market make agility more and more necessary. Pension funds face changes such as pension administrators withdrawing from the market, new laws and regulations, rising member expectations and further digitalisation of the sector. In this changing market, an agile pension fund keeps moving with the changes and makes well-founded strategic choices.
What makes a pension fund agile
To understand how board members deal with developments in the sector, DataTrust carries out ongoing market research. The research shows that a large share of board members see operational agility as a key condition for a future-proof pension fund.
Board members link agility first and foremost to continuity, including during technical disruptions or failures in the administration. That puts operational agility close to operational resilience: a future-proof pension fund needs alternatives to safeguard its administration and its pension schemes.
At the same time, board members don’t just see agility as a way to stay independent of their pension administrator. They also see it as a way to strengthen the partnership. A future-proof pension fund makes clear agreements, with room for tailored arrangements and an ongoing dialogue between fund and administrator. The result is a resilient partnership in which the fund stays in control while benefiting from the strengths of outsourcing.
Increasing operational agility in your pension fund
So what does a pension fund do to achieve operational agility? A first step is an agility assessment of the pension administrator. This assessment looks not only at operational capacity, but also at adaptability, the ability to develop and renew, flexibility in processes, the quality of the partnership and the extent to which the pension fund keeps real options open.
Control of data also matters. That requires an independently managed data foundation, separate from the pension administration. This has several advantages. After a transition or the transfer of existing rights into the new system, you keep insight into accrued rights, member characteristics and scheme rules. It also enables recalculations and reconstructions over the entire period of membership. And if a fund decides to move to a different pension administrator, this foundation supports a faster, more manageable transition.
Regular data deliveries from the administrator also let you carry out independent data quality checks. In practice, these checks regularly reveal operational and IT risks. That gives direction to the conversation about improving systems, processes and control measures.
Want to know more?
The research gives a picture of the considerations, concerns and choices that matter to fund board members. We’re happy to share these insights with the sector, to take the conversation about agility, administration choices and future-proof governance further.
Would you like to discuss this or explore what it means for your organisation? Get in touch.
