Podcast 2 - Planning for the future

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A full transcript of this podcast is reproduced below.

"Hello, I'm Garry Morrison, Corporate Pensions Director at Standard Life, where I'm responsible for the operational and relationship management aspects of our corporate pensions business. I'd like to share with you some of my thoughts on the impact that Information Technology has had on the Corporate Pensions market here in the UK.

I want to start off by making one thing clear, and that is, what I know about IT you could write on the back of a stamp. But I don't see my job to understand how the technology works. Rather, it is my job and that of other fellow directors in the corporate pensions market, to understand how IT can help achieve our business goals.

For me at Standard Life, that objective is simple - to retain and grow our existing business and to attract new clients through providing service which is both market leading and to do so at low cost. While that will satisfy the needs or our shareholders, I believe our responsibilities are much wider than that. Specifically, helping employers provide valuable benefits for their employees and for those employees to make suitable provision for their retirement.

Not that long ago, pensions administration was largely a paper-based activity. This was expensive and time consuming for everyone involved.

Over the last few years, the industry has successfully deployed technology that enables employers’ HR systems to effectively 'speak' directly to their pension provider’s back-office admin. Instead of masses of paper being generated and then moved around the country, with a lot of to-ing and fro-ing to ensure the data is correct, technology has allowed us to have built in validation which means the data that is submitted is the data that is actually needed.

So what used to take significant manual effort, can now happen almost immediately, a significant benefit for employer, provider, the regulator and, of course, the plan member themselves.

So what has this meant for employers?

Well, as the HR Director of one of our clients put it, before using online technology, he had one person spending half their time on pensions administration. Since switching to submitting their data electronically, this takes the same person 2 – 3 hours per month doing the same thing. Clearly a great outcome for him, allowing that employer to spend less on administration and more on investing for their employees.

And what does this mean for providers?

In our case, this has had a significant impact on our costs. To put this into context, five years ago I had nearly 900 people in my division administering pension schemes. Today that figure stands at just over 400 people.

At the same time, even taking into account the current economic downturn, our assets under administration have trebled. So instead of off-shoring routine administration, we have, in effect, outsourced to technology. Clearly this has a significant, positive impact on our bottom line, without in any way compromising the high values of the customer service we provide.

However, challenges remain. Whilst, as an industry, we have managed to engage the HR departments and finance departments in helping employers run their pension schemes more efficiently, as an industry we still have some way to go to fully engage pension plan members themselves.

This may be because however important pensions are, many of us find pensions both complex and, let’s face it, a bit dull.

The primary focus of providers is to ensure that the public are actively preparing for the third stage of their life. I believe that technology will play an ever-increasing role in making this happen.

I’ve seen some fascinating and really important developments in terms of interactive planning tools, the use of video, in podcasts and webcasts, which can help members of the public get more out of their pension plan. I eagerly anticipate the creative and innovative ways our industry will realise the potential of technology to engage people in their financial plan for life."

Garry Morrison is the Corporate Pensions Director at Standard Life with responsibility for all operational and management managemant aspects of the company's UK corporate pensions and healthcare businesses. In nearly 30 years of service with the organisation, he has also been Head of Intermediary Distribution Strategy, Group Head of e-Commerce and Vice President of Group Savings and Retirement in Montreal.

www.standardlife.co.uk