Whilst a focused pensions workforce is essential by itself it is no longer enough to ensure the highest quality service to scheme members and the latest IT systems are vital to provide the level of service customers demand.

Local Authority Pension Funds in particular are beginning to see the use of internet-based technology within pension administration, but the rate of adoption by schemes is disappointingly slow. This technology represents not only the potential for a new way of communication with members, but also provides potential efficiency savings within the scheme administration in several ways:

• Enquiries to the department are reduced if members can retrieve the information they require for themselves on a 24/7 basis
• Members can initiate processes themselves, for example requesting retirement quotes or information packs, or even changing bank account details on-line at any time and from anywhere.
• Information provided by members does not need to be re-keyed into another computer system: the workflow processes take care of that
• Pension scheme Web Sites provide a communication forum for members, increasing the sense of ‘belonging’

The West Midlands scheme Web Site www.westmids-pensions.org.uk currently records about 200 hits per day from Scheme members and is growing in terms of its use as a medium for interactivity between the Fund and its customers.

The over 55 age group is the 2^nd largest growing on the Internet, next to the under 20’s. This means that we face both a short-term demand for internet-based facilities, but perhaps more disconcerting is that the next generation of employees will come into our organisation fully expecting this kind of facility. The pensions industry in general has some catching up to do if we are to avoid being left behind in the technology race. The technology is there – it needs pension scheme managers to understand its capabilities and demand it’s implementation.

The ultimate ambition of staff at the West Midlands Pension Fund is to provide access to individual scheme records for every member of the Scheme through digital TV. We want to be able to send benefit statements to all our members in the West Midlands which can be called up on screen while they are watching TV. Digital TV will give us the capability to do that.

The implementation of pioneering technology is widely acknowledged as essential to achieve the targets set by the government. Scheme managers strive to achieve Best Value and increasing efficiency with new IT within the Pensions Department is a very large stride in the right direction.

Wasting time and effort is a common complaint amongst pension scheme managers. members, administrators and pension scheme managers all waste some time and effort during their working day. Hunting down information is a prime example, as is identifying who they are talking to and a manager collating statistics for performance and disclosure reports may not be the best use of their valuable time. In an industry where client service is the differentiator above all others, the emphasis is on schemes to provide the best possible service and IT is essential if this objective is to be met.

We should be constantly striving to improve the interface with and involvement of scheme members. We should seek to enhance the service provided both to members and to employers and simultaneously improve the efficiency with which we operate in order to reduce the cost burden to employers. This can only be achieved by constantly identifying improvements to business practices and procedures within the pensions administration department. In summary, we should be imposing our own change on a regular ongoing basis.

It is not acceptable for Pension Managers to maintain a "laissez faire" approach. A degree of pro activity is required in order to ensure that the full benefits of information technology are identified and implemented at the earliest opportunity. In the case of the West Midlands Pension Fund we identified our requirements and entered into a partnership with Comino plc in order to produce a Local Government Pension Scheme compliant version of their award winning Universal Pensions Management system.

This system has revolutionised the administrative processes within the department and resulted in an improved more accessible service to our customers. At the same time it will help drive down our costs and assist in the achievement of "Best Value".

The process of implementing the new system has been a mixture of exhilaration, frustration, challenge and, at times, despair.  The first requirement was to install a server based local area network to replace the existing mainframe installation on which our legacy pensions administration system was based. This in itself proved a challenge to an organisation whose major ICT skills were in the traditional mainframe area.

The local area network has been in place since our new system went live on 31 May 2001. Whilst the system works reasonably well it has focused our attention to major areas such as the need to ensure up-to-date backups of data and system response times.

An essential component of the new system is that of electronic document management. When for example dealing with telephone enquiries the "seek" time for displaying such image based documents is of high importance. An important upgrade to the initial installation is planned for May 2002 whereby the use of optical disks, which are useful for long term maintenance of stored images, will be supplemented by equivalent data on magnetic disk storage which will radically improve "seek" times by removing the electro mechanical aspect of image retrieval and utilising electronics alone.

One of the factors we have encountered which relates primarily to the Local Government Pension Scheme, but I am sure impacts elsewhere is the complexity of the Regulations under which we operate. That would not be such an issue if our system only had to reflect the current Regulations. However the Department for Transport, Local Government and the Regions have historically when enacting any new Regulations incorporated a saving which protects a member’s entitlement under any previous Regulations. It is therefore necessary for us to ensure that our calculation suites carry out comparisons with all previous Regulations, some of which go back to the 1920’s.

Quite obviously, the design and implementation of the new system has produced a number of challenges for pensions administration staff of the Fund. Specifically staff have needed to acclimatise to a Windows based PC system, rather than the traditional mainframe system. Fortunately many of the staff are young and computer-literate and have used PC’s during their school life and at home. Familiarisation with the system itself and its new processes has also provided a challenge. The staff had worked with our legacy system for a number of years and were totally familiar with navigating the various processes.

With hindsight, and for very understandable reasons, we were not in a position to provide adequate training and support through user manuals when the system was first installed. Work is still in hand to remedy that situation and I would suggest to any other pensions organisation considering embarking upon the installation of a new computerised system to ensure that these important matters are fully considered and avoid some of the frustrations experienced by my front line colleagues.

A further challenge has been to ensure that the appropriate infrastructure to support the new system is in place and is robust enough to ensure continuation of service. Another massive consideration is ensuring a robust data migration from the legacy system.

It would be easy to believe that our existing databases are accurate and complete. The reality is sometimes very different. How many systems continue to hold temporary National Insurance Numbers and addresses that do not follow a consistent structure? How many systems continue to be overpopulated with details of Scheme members who have been deceased for many years? It is vitally important that a comprehensive data cleansing exercise is carried out before data is migrated. If you put rubbish in, you can only expect garbage to come out.

One of the fundamental aims of the West Midlands Pension Fund, when designing this new system was to allow access to Scheme records by Scheme employers and eventually Scheme members having access to their own records. Both data and system security is vitally important and provides a challenge when designing systems to negotiate firewalls and other security features built into most corporate systems.

The migration between highly complex and differently structured systems will inevitably create downtime. It is important to manage downtime by ensuring work is as up-to-date as it can possibly be before migration commences and identifying a strategy by which backlogs will be dealt with, particularly having reference to prioritising the most urgent pensions matters.

Moving to a state of the art sophisticated computerised pensions administration system has obvious benefits to the organisation once it has been completed. However, the effort involved in achieving a successful outcome should not be underestimated. In my own opinion like divorce, marriage and moving house, it should only occur on a very limited number of occasions in a lifetime.