The Nottinghamshire County Council Pension Fund is implementing portals for both employers and members as part of a push to improve administration across the scheme.
Administration can be a major headache for local authority pension funds. Results of the Pensions Regulator’s public service governance and administration survey in May showed that out of 24,000 employers, only 55 per cent provide good data as a matter of course.
Having a system is one thing, but actually having users who have been educated on what it is they’re doing is the second part of that
Ian McQuade, Muse Advisory
From 2018 the pensions watchdog will require scheme managers to report on their record-keeping standards in the scheme return, in order that it can more effectively step in if a fund is failing in its duties.
Nottinghamshire’s £4.9bn pension fund is already taking steps to develop its approach to record-keeping.
“A number of developments are being progressed in order to support employers with their pensions administration,” including a project to develop an employer portal, according to the scheme’s latest report. The scheme has 270 contributing employers.
It said a portal would enable the larger employers to access “the pension records of their employees together with a calculation suite, for the provision of estimates direct to employees”.
The report outlined plans to provide information through the portal by April 2017, but the scheme has since highlighted that it is still in development and has not yet been implemented.
Future changes will aim for “greater web compatibility and the transmission of data electronically”.
Ian McQuade, director at governance specialist Muse Advisory, said it is not unusual for corporate schemes to use employer portals, but is less common among local authories.
“It’s a slightly more complex set-up because of the number of employers that are involved,” he noted.
He added that “if the employer has the ability to review the data, it can ensure that the data is accurate at all stages”.
If an employer is assessing the cost of putting some benefits into payment for someone who is ill, a portal can help the employer access that information themselves, meaning they can self-serve, McQuade said.
The challenge, he added, is whether the employers have the knowledge to be able to go into the system and know exactly what they are doing.
If an employer’s staff do not know how to use it, McQuade suggested, they might just phone the council and ask them to do it instead.
Offline strategy is key
The scheme will also be implementing a portal for its 127,000 members.
Daniel Taylor, client director at administration specialist Trafalgar House, said “if you can get members to self-service, then it alleviates a lot of the work that goes through admin departments”, thereby controlling costs. It can also benefit members in terms of their engagement and effective retirement planning.
However, so far “the pensions industry has not been successful in implementing those platforms and getting enough members to use them”.
He said websites are often developed as an online strategy, but the offline marketing of these portals does not follow through.
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Paul Waters, head of guided outcomes at consultancy Hymans Robertson, said most member portals just contain standard information such as scheme booklets, joiner forms and contact details.
“The second level above that is to provide educational content and tools, which actually help the individuals to make decisions based on their own circumstances,” he said.
The third type of portal is a “one-stop shop that enables you to increase your contributions, or change your investment strategy, or get straight in touch with a financial adviser” or other source of help.
Schemes investing in their own sites risk being overtaken by banks and fintech companies developing their own resources.
Waters said: “The question is… will the majority of the UK population use one of those sites… or will they go to a scheme-specific pension website which might not be as well marketed or as popular?”
