The transition to the new pension system. It's really going to happen in the coming period. The first funds will be transferred on 1 January 2025. Transition plans of dozens to hundreds of pages have been written. In addition, an unprecedented number of articles and insights were shared by specialists in the internal organization and the outside world. At the same time, for many pension administrators, it still feels like a topic for the future. Not surprising, since there is no practical experience to share yet. What is not so bad in the end and where are the real challenges that have not yet been foreseen. In this article, Hyfen would like to take you through a number of points of attention aimed at the internal organization and the sharing of the latest knowledge and insights.
Major increase in required analyses, policies and documentation
For the transition to the new pension system, many analyses are being made of the new situation in relation to the current situation. How should the gaps between the twobe filled? Policies and processes will be adjusted. Moreover, for many implementers, significant changes are also being made in the application landscape. One way or the other, as a pension administrator, you cannot avoid drawing up a lot of new documentation. Adaptingexisting documents to the new reality, for both the transition period and the final situation.
This is an important task where accuracy and attention to detail are essential. Each document must be evaluated for relevance to the new system and adapted where necessary. The interconnections between documents add to the complexity of this exercise. This means that pension administrators must invest in knowledge development and training of their employees, so that they are able to implement the changes and communicate them to the participants. It's also an opportunity to streamline and further digitize processes. In the long run, this will lead to more efficient workflows.
Learning from each other
The transition ofthe first funds to transition to the new system will provide valuable insights. How are laws and regulations interpreted and how do the regulators view the choices made by these funds and their administrators? It is important that these lessons learned are actively shared and applied throughout the sector. This requires a culture of continuous improvement and collaboration throughout the pension ecosystem. By exchanging experiences and adopting best practices, pension administrators can help each other to carry out the transition as efficiently as possible. Especially during the transition period, it is important that the quality of service is and remains of a high level.
Participant support
Participants are at the heart of the pension transition. As a pension administrator, you cannot avoid supporting them with clear, up-to-date and correct information. In practice, this will mean that pension administrators will have to invest in effective communication channels and tools, such as websites, (news) letters and personalised communication. The aim is to help participants gain the knowledge they need to make informed decisions about their pension.
Controlling costs
The transition inevitably entails additional costs. How do you maintain the balance between wanting to support participants in the best possible way, while at the same time keeping a sharp eye on the extra implementation costs for the transition? It is therefore important to develop strategies that control these costs. This can be done, for example, by automating processes, centralizing services and making smart use of technology. By being cost-conscious and investing smartly, pension administrators can minimize the financial impact of the transition.
Increase in communication with participants
A big question will be how pension administrators deal with the increase in participant communication. For the time being, expectations in this area vary considerably, with some parties expecting five to ten times more communication. This means that there must be sufficient capacity to answer questions and that various means of communication must be used to get the message across. It is important to find a balance between face-to-face contact and digital communication, so that participants feel heard and understood.
What can we set up today?
While the transition may still feel a long way off for some, it's important to take action now. Drawing up a detailed transition plan and starting to implement changes will help you avoid getting into trouble later on. It is essential to create a sense of urgency within the organization so that everyone is aware of the need to act in a timely and appropriate manner. At Hyfen, we expect that the further digitization of processes and communication in combination with smart tooling can make a difference.
More about how we are going to put this into practice and what the possibilities are soon!