The future of pensions administration: why now really is different

There’s always been talk about the future of pensions administration. A new system here, a process tweak there – promises of transformation that rarely move the dial all that much. So why is now any different?

The truth is, we’re standing at a genuinely new threshold. Not because of some distant prospect of technology changing things, but because of what’s already starting to land. We’re seeing a wave of emerging tools – artificial intelligence (AI), automation, natural language models, smart workflows – that don’t just improve what we already have. They allow administrators to do things differently.

From automation to impact

Perhaps the more meaningful shift is this: accessibility.

Historically, genuine innovation in this space needed custom builds – specialist suppliers, big budgets. That meant most administrators – particularly in-house teams – were locked out. Technology wasn’t just expensive; it was slow, hard to integrate, and mostly out of reach.

That’s no longer true. Today’s tools are off-the-shelf, cloud-based, and low-cost. Whether you’re a third-party provider or an in-house team, you no longer need to rip out your systems and start again. You can bolt on, retrofit, and layer new capability onto existing infrastructure – and start seeing benefits in weeks, not years.

That’s a game-changer. Especially for those who’ve spent the past decade stuck behind hard-to-move platforms or told they don’t have the budget to improve member experience.

These new technologies mean broader access to intelligent automation at scale. Administrators can automate not just the small tasks, but the bedrock of operations: data analysis, workflow management, member responses, task tracking, and communications.

This has been talked about before, but what’s new is how fast and cheaply it can now be done. AI models can read a document, understand it, classify it, and launch the right process – all without human intervention. For teams juggling high case volumes, changing regulations, and legacy pressures, that’s not just helpful – it’s transformational.

AI-driven workflows: from rigid process to intelligent flow

One of the most exciting areas right now is AI-driven workflow design. This isn’t about dressing up the same old process with a slicker interface. It’s about letting technology truly manage the journey – from interpreting a member’s request, to matching it to the right action, to triggering a personalised series of steps that feel responsive and relevant.

Today, most administrators work within linear, fixed service level agreements (SLAs) – case type X equals turnaround time Y. AI-driven workflows allow for much more nuance. They can assess the urgency of a request, read sentiment, and analyse risk. A stressed member chasing a cash equivalent transfer value can be fast-tracked, while a casual enquiry about long-term projections might be assigned a slower path – not because it matters less, but because it matters differently.

That’s the leap: from rigid task-based SLAs to experience-based workflows. From treating all cases equally to treating each member appropriately.

And beyond just triaging cases, these tools can also keep members informed. Uncertainty is often the biggest cause of stress in a customer journey – more than delay itself. AI workflows can send updates, set expectations, and issue acknowledgements. Members feel seen, supported and less in the dark.

Personalised communication – and the guardrails we still need

AI-powered tools can now produce tailored messages, templates, and outputs based on member data – and do so almost instantly. No more “Dear Member” letters with endless footnotes and generic disclaimers. We’re moving toward communication that is clear, individual, relevant, and scheme-specific – without it taking weeks of manual preparation.

That’s not just better member experience – it’s better efficiency. And, crucially, cheaper.

There’s an important caveat here: guardrails matter. In a financial services environment, it’s essential that AI-driven communications are consistent, accurate, and overseen. The goal isn’t to remove people from the loop entirely – it’s to allow administrators to focus on nuance, judgement, and oversight, rather than formatting documents or chasing down approval chains.

Used wisely, this kind of personalisation has the potential to transform how members engage and how administrators manage their workload.

All of this leads to something that really needs to be recognised – something specific to pensions administration and often ignored in broader transformation narratives: margins.

This is not a sector flush with spare cash. Many administration contracts – particularly for in-house teams or smaller third-party providers – operate on tiny margins. Some are loss-making. This has traditionally made meaningful technology investment difficult to justify, even when the case for improvement was obvious.

That’s what makes this moment different. These tools aren’t just more powerful – they’re more democratic, more affordable, and more immediately usable.

Crucially, they have the potential to improve the member experience, reduce costs, and strengthen commercial viability.

What happens next?

None of this means pensions administration will change overnight. There are still risks and regulatory constraints that require oversight. A natural caution is healthy.

But something has changed.

In-house teams that were once locked out of the transformation conversation now have real options. Third-party administrators long forced to pick between margin and member service now have tools that support both.

The technology exists – and it’s not locked behind high costs or long build cycles. It’s available. It’s powerful. And it’s ready to be used by the sector as it is today – not just the idealised version we keep talking about.

For administrators, and for the members they serve, that’s not just promising. It’s overdue.

Dan Taylor is a client director at Trafalgar House.