By Tim Taylor, Chief Marketing Officer eg solutions plc
Retirement planning has undergone a seismic shift since the announcement of the UK pension changes in this year’s budget. In April 2015 many individuals aged 55 or above will get the chance to withdraw part or the whole of their pension pot as a cash lump sum if they wish to do so. As a result of the changes, industry providers have had to radically change their propositions and products and unsurprisingly queries have begun to flood in causing the pensions industry major logistical headaches.
Pension savers will now be able to drawdown and invest as they see fit and are no longer obliged to take out an annuity. As a result, annuity providers have already seen a marked downturn in applications, and the changes have created a heightened interest in pensions from people at varying stages of their retirement planning. This is creating a frenzy of activity for financial advisers and pension providers alike. All coming in a year that has seen the introduction of guidance guarantee, a proposal to ensure that greater freedom and advice is being offered to those approaching retirement.
Pensions providers are spending an increased amount of time speaking to clients to respond to questions savers may have about how the changes impact on their retirement. For the majority, this will prompt a substantial increase in administration, resources and training to deal with what some have described as a bow wave of activity. Some major pension providers have already indicated that they are already struggling to cope with the pace of the reform outlined by the Treasury and the increase in workload it brings. From our own discussions with customers, one provider has estimated the need to double the workforce to cope with just one pension book describing the incoming work as a ‘deluge’.
Many enquiries will be complex and need to be handed off from contact centres to the back office teams. Gaining control of workloads by optimising the back office workforce will become all the more important as companies strive for efficiency and avoid being overwhelmed by incoming queries. The ability to gain control and understand the workloads and capacity while observing and evidencing compliance regulations will be crucial. Firms are seeking every opportunity to make efficiency improvements and reduce administrative backlogs to, not only maintain but improve customer experience and efficiency. It’s a difficult challenge to overcome given the increased need to provide recommendations and face-to-face advice. Firms have an opportunity to optimise back office workforce processes, manage work arriving through multiple channels and increase back office capacity through existing resources to cope with demand. Now is the time to embark on an efficiency drive especially as the year comes to a close while we await further changes in 2015.
Technology can help provide a solution to help bridge the gap between front and back offices, the provider and the consumer. Solutions are available today that guarantee the creation of extra capacity from existing resources and provide evidence that their processes are meeting regulations. Never before will so many depend on so few as the demands of the UK savers lay siege to their pension pots. Using an enterprise back office workforce optimisation software solution to provide the control, visibility and ability to continually improve processes, skills and capacity ensure they are not overloaded they tackle the predicted increase in workloads. Having the ability to balance workloads, in real-time, between individuals and teams according to their availability, capability and backlog to optimise the time available can help to not only maintain, but improve, customer satisfaction. For pension providers this means the reduction of end-to-end processing times, increased accuracy and the ability to meet or exceed SLA targets.
In this time of great change, firms are quite rightly concerned with performance, customer satisfaction and the cost of delivering the service driven by regulations. Incoming work will extend beyond contact centres to back office therefore pension providers will also need to revise forecasts and blend resources to match peaks in activity. This will be key to ensuring that they are complaint and are able to avoid any operational risk.
Pensions providers are already busy with these new changes, and the amount of administrative backlog they’ll have to overcome in the New Year should be pre-empted. Some challenges, such as how to apply tax to certain withdrawals, and how much they should charge customers have still not been addressed by the Treasury, so pensions providers need to be prepared and ready to hit the ground running when they are. Keeping to the old adage “an ounce of prevention is worth a pound of cure”, firms should look to make sure that are well equipped to deal with increased queries in advance of the rules we are expecting in April. A smooth back office will be a vital component in this preparation.