The Pension Protection Fund has shifted the majority of its member transactions occurring online, beating its target set for 2022, as the lifeboat adapts its services to cater for a large influx of members.
Since insourcing member services in 2017, the PPF has been encouraging members to use the digital services it has available, and had set a target for 70 per cent of all transactions to be conducted digitally by 2022.
However, the pensions lifeboat has been able to hit that milestone in the 2019-20 financial year, with more than 35,000 members using online services – corresponding to 77 per cent of all transactions.
Sara Protheroe, chief customer officer at the PPF, tells Pensions Expert that the “massive increase” when compared with the previous period – with 55 per cent of online member transactions – is due to the effort made by the organisation in communicating these services with members.
I think we were the first DB pension scheme to offer the ability to retire online – members can go to the website and within half an hour put themselves into payment – which is kind of fantastic
Sara Protheroe, Pension Protection Fund
She says: “We are really keen that as many members as possible know about what they can do online with the PPF.
“I think we were the first defined benefit pension scheme to offer the ability to retire online – members can go to the website and within half an hour put themselves into payment – which is kind of fantastic.”
However, the take-up of this service online is still slow, with 73 per cent of members doing it by traditional methods.
PPF members can also change address and bank account online, get a P60 or a payslip copy, obtain a benefits statement and nominate a beneficiary.
Online services help with members hike
Ms Protheroe explains that part of the rationale for this online services push is due to a large influx of members.
According to the PPF’s annual report, the lifeboat saw 17,119 new members transferred in 2018-19, which compares with 6,057 in the previous year.
“We haven’t actually increased our headcount as a result of these increases in membership (…) because more members are choosing to go online,” she says.
“We’ve been able to keep our headcount stable, which is great for levy payers and for members because we are using more of our money to support them.”
Ms Protheroe gave as an example the 17,000 new members from three Carillion schemes that joined the PPF in the first quarter of 2020.
“We included a flyer with their welcome packs telling them about the online services, and 23 per cent of them [by April] have already registered for the website. They are looking at online benefit statements, so they know what compensation they will be entitled to from the PPF, nominating beneficiaries, and some of them are, indeed, retiring.”
However, the PPF is conscious that not everybody will want to go online, and it will always keep all channels of communication open, she adds.
For the future, the lifeboat is looking to expand the services available online, such as a web chat service, Ms Protheroe notes.
“We think that some members would be interested in that, so we’re going to be exploring that as a possible addition to what’s available,” she says.
PPF will also look to improve the uploading of documents to the member website, and possibly offer bereavement processes online as well.
On the latter, Ms Protheroe says: “When we started we didn’t think that was necessarily something that people would want to do online, but I think we are realising that as more and more people are using the online services for a whole range of different circumstances, that this is something we would like to explore.”
DB sector still lagging on technology use
While more than 1,000 PPF members were able to retire online during the past financial year, most individuals with a DB pension are still having to use traditional methods.
According to John Reeve, director at Cosan Consulting, some schemes are able to provide retirement quotations online so that members can determine how much their benefits are going to be, “but then they need to fill all the forms and post them or scan them, and there needs to be some admin intervention”.
Mr Reeve notes that the industry is still “a little way off” in having the process fully automated, but a lot of schemes have self-service on their road map for technology improvements going forward.
PPF could postpone 2030 funding goal amid Covid-19 crisis
The Pension Protection Fund could postpone its goal of being fully self-sufficient and 110 per cent funded by 2030 if needed to face the current coronavirus pandemic, but will avoid “any kind of knee-jerk reaction”.
He says: “How quickly that will happen, I don’t know. I suspect that the current situation – with the coronavirus crisis and people working from home – might accelerate some of that thinking and create more robust processes.”
Paul Tinslay, professional trustee at Dalriada, agrees with this view. He notes that development of DB facilities has certainly increased in recent times, and that schemes will be investing more in technology in the future.
“It provides members with the ‘I want it now’ culture, which we are all kind of demanding and getting used to, but also it reduces administration processing costs,” he says.
