Improving Relationships & Reducing Risks
TPR’s 21st Century Trustee needs to carefully consider the operational aspects of maintaining a pension scheme. To achieve smooth day to day scheme operations, it’s vital all processes and procedures work well. It’s even more important the trustees, employer and service providers understand their defined roles and responsibilities. However in reality these roles and responsibilities can become blurred over time. This affects service delivery and relationships, as well as impacting on a scheme’s operational cost. KGC is on hand to provide support in making your processes and relationships work more effectively and reduce operational risk.
As part of a KGC Scheme MOT we work with in-house departments and out-sourced providers to re-scope these defined roles and responsibilities, interactions and re-engineer the processes to optimise the scheme’s operation. This is a key step in eradicating the risk of gaps and overlaps, which also increase costs. A KGC Scheme MOT is a detailed analysis of your scheme’s operations. This involves us reviewing and assessing the pension touch points, processes and procedures – including any in-house team (admin, HR and payroll), scheme administrator(s), Scheme Actuary and any other consultants. The resultant re-engineered processes are agreed and prioritised as part of the MOT.
Once we have an insight into how your scheme operates, we can identify risks, gaps and overlaps. We address any risks and highlight the consequence of ignoring them. A product of the MOT is we draw attention to behavioural changes needed by any stakeholders, which could bring more efficiencies to your service delivery. Value for money is a by-product of the MOT and as a bonus, costs are often reduced.
The main focus of our output is to ensure your service matches your needs, as well as reflecting current market best practices. We do this by recommending remedial action and where necessary advising how to protect your scheme from inadvertently failing in its governance duties.
Case Study – Client Financial Sector
Our client has a dual sectioned Scheme with DB and DC sections. The scheme was administered by different providers for DB and DC which had given rise to issues for members, the employer and the Trustees. We were called in to provide assistance and to ensure the relationships between the different providers, the employer and the Trustees improved. To achieve this we carried out a KGC Scheme MOT and reported back to the Trustees.
As a result of the audit and our recommendations, practices and processes were modified. Each provider had clarity of its roles and responsibilities, the employer instigated clearly defined amended processes that no longer caused confusion. The Trustees agreed to amendments in the way DC records were held, eradicating the shadow records the DB provider had been obliged to hold, this in turn reduced confusion and costs. Members no longer received two sets of retirement information, as the providers now conferred when members with both benefit types retired.
The audit process ironed out duplications, improved the communication and flow of information between all parties and led to an improved service for the members.
Testimonial
‘The trustees of The Dun & Bradstreet fund worked with KGC on a significant project to streamline the administration and operating risk within the pension plan. This has had extremely positive results in removing risk and cost from the plan. The project was run on a very professional basis and to tight time-lines and the trustees view it as having had an extremely successful outcome‘.
Garry Kent, Secretary to the Trustees – D&B