Defined Benefit Solutions

Transcription

1 Defined Benefit Solutions Looking after you and your members A trustee guide to buy-in and buy-out policy administration For professional financial advisers and pension trustees only. Not approved for use by pension scheme members, employees, or any other persons.

2 2 Defined Benefit Solutions Expertise and focus to deliver seamless scheme transition I head-up our DB operations team and am responsible for underwriting, new policy implementations, ongoing administration and customer service for trustees and policyholders. I ve extensive knowledge of the pensions industry where, over a period of 30 plus years, I ve focussed on operations and customer service. Initially, working at Prudential in Corporate Pensions administration, moving into the pensions de-risking market over 10 years ago, working for Paternoster and then Rothesay Life before joining Just. I joined Just in 2012 to establish the dedicated operations capability for the DB Solutions team and after just 5 years, we ve proved ourselves as responsive, effective and scalable. My priority is to make your journey from transaction to administration a smooth one. Whether we re advising your current administrator on data cleanse, checking your monthly payroll or issuing individual annuity policies to your members at buy-out, my team and I are committed to delivering the best possible customer service for you, your members and our policyholders. All elements of our administration process have been carefully designed, applying the learnings I ve gained during my career and are managed by my in-house defined benefits operations team. They bring a wealth of expertise in pensions and defined benefits de-risking. In order to provide scalability we work with our external administration partner. They support our service delivery and we retain full accountability for and oversight of their work. We remain the only point of contact with you and your administrator, throughout the lifetime of your policy with us. We have controls in place to check everything completed by our administration partner before it s sent to you or your administrator. We act as a second pair of eyes to ensure issues are managed, payroll is accurate and monthly payments are made on time. So you can be confident your policy administration is in safe hands. I am proud of what we have achieved and whilst I believe we have a great service model, I am committed to continual improvement to meet the evolving needs of trustees and their administrators. If you have any questions or would like to discuss any aspect of our customer service, then please do not hesitate to contact me or my Operations Manager, Julien Smith. Heather Vaughan Head of DB Operations Service philosophy Audit built into the process In house DB team

3 Defined Benefit Solutions 3 managing buy-in and buy-out Buy-in We appoint one of our client relationship transition managers ( transition manager ) to manage each scheme transition. They ll be the key point of contact for you and your administrator and offer guidance through every step of the data cleanse and policy set up, from transaction to business as usual. They ve worked with the majority of third party pension administration providers over the years. So they re well versed in how to anticipate and resolve issues quickly and effectively. They understand the main data issues encountered by client administration teams. For example, how to verify overseas members or show complex benefits in the Finalised Data Schedule. We treat each transition as a project. We agree and document processes and timescales so you and your administrator know what s required and can track and monitor progress. Meanwhile, we manage delivery giving you peace of mind. Please refer to the diagram on pages 4 and 5 which details the process. Buy-out Buy-out is the final stage of any de-risking journey. We replace buy-in policies with individual annuity policies and take-on all responsibility for members as they become our policyholders. This includes the administration and payment of their benefits and all communications. With over 500,000 retail and defined benefit policyholder customers, the culture of administrative excellence is well embedded across our business. This helps ensure our member experience is of the highest standard and applied across all transactions and communications. Our in-house team and administration partner are highly experienced in managing the buy-out process we ve completed 31 since They work closely together to ensure a strong understanding of each transaction so everything is set-up correctly. For schemes that go straight to buy-out, the initial five stages of buy-in are completed. Then buy-out commences and our operations team work with the transition manager and your administrators to manage the process. The transition manager maintains overall accountability until the process is complete. At which time they hand over to our operations manager and her team. Please refer to pages 6 and 7 for more details. A detailed project plan for every transition Your transition manager a single point of contact and responsibility

4 4 Defined Benefit Solutions The administration process for buy-in We appoint a dedicated transition manager who will be your single point of contact from the point of transaction until the transition process is compete. They are part of our business development team so will already be familiar with your scheme and ready to support the transition. 1 Project Kick-Off Meeting We meet to discuss the scheme and benefit structure to ensure common understanding. We agree timescales for transition and requirements for data cleanse and monthly reporting. Trustees, your administrator and your adviser attend this meeting. Control ensures everyone understands what is expected and their contractual commitments. 2 We start Monthly payroll funding to trustees Our regular monthly lump-sum payments to you commence. Initially this is on a predetermined payment schedule on pre agreed dates. We will confirm payment once made and request confirmation of receipt. Your administrator provides monthly movements. Control ensures the payment process works and fits with your current administration processes. 5 we finalise premium and create shadow records The FDS and FBS supplied by your administrator are used to calculate the final premium due and any adjustment to the cashflows paid to date (a process we call true-up ). Our administrator uses the schedule and specification to set-up shadow records. 6 ongoing reconciliation We administer the benefits in line with the policy. Each month we create and supply a monthly payment schedule to your administrator so they can reconcile the member payments against their own records. Your administrator reviews the schedule against their own payment records to ensure payments to individual members are in line with the benefits you ve insured. Control these records enable us to apply member movements and calculate accurate monthly funding and any balancing payment or credit due. Control ensures the monthly payments we make are accurate and as expected.

5 Defined Benefit Solutions 5 With a buy-in from us you re not only securing payments for the members you ve insured, you re buying peace of mind. Our dedicated DB team are delivering a layer of control to help ensure payments are accurate. 3 a DATA CLEANSE IS PERFORMED Finalised data schedule and finalised benefit specification are supplied to us by your administrator. 4 data validation We check the Finalised Data Schedule and Finalised Benefit Specification to ensure they cover the members we originally quoted for. The existence of members is confirmed and their personal details verified. Your administrator confirms details of the membership and benefits to be insured by supplying us with a Finalised Data Schedule (FDS) and Finalised Benefit Specification (FBS). Our transition manager provides guidance and support to your administrator so workload can be kept to a minimum. Control ensures accurate details of the members and the benefits to be insured are agreed. We check member details including DOB, gender and any movements that have been notified by your administrator are included. Once this benefit validation is complete, the FDS and FBS are signed-off by us and you, as they form the basis for calculating the final premium, future payroll and benefits payments. Control ensures the data provided by your administrator is as expected and is sufficient for us to price and administer the policy. 7 Ongoing Policy Administration We pay the monthly sum due and the process of payroll calculation and reconciliation repeats each month. We continue to create and supply a monthly payment record and conduct quarterly mortality screening. We complete regular audits of your administrator s Policy processes. A partnership with your administrator Your administrator continues to confirm details of movements, confirms existence of unverified deaths and completes annual certificate of existence checks for overseas members. Control this is used by us to adjust monthly payments so they re accurate. Mortality screening reduces delays in death notification and likelihood of fraud. Audits ensure adherence to agreed processes and policy terms. They also provide an opportunity to discuss the policy administration with your administrators, providing support throughout. Payments checked to ensure they re accurate

6 6 Defined Benefit Solutions The administration process for buy-out Your transition manager remains your main point of contact throughout the transition process and works with our operations team to implement the buy-out and issue individual policies to your insured members. 1 Project Kick-Off We meet with your team to discuss the current operation of the scheme, to flush out any complexities or specifics of the administration and to agree timescales. If required, we can check up-to-date data to check the benefits under the policy are in line with the benefits you re paying your members. Trustees, your administrator and your adviser attend this meeting. Control ensures everyone understands what is expected and their contractual commitments. 2 We set-up payroll and validate data In the run up to buy-out we will pay you regular monthly lump sum payments. Ahead of buy-out, your administrator provides details of member payroll reporting. Once our payroll is set up and tested we will work with your payroll to close their records ahead of the transfer. Our administrator uses this information to set-up parallel payroll runs ahead of payroll transferring to us. They reconcile these replicate records against the member payroll produced by your administrator, before the buy-out process is complete. We also undertake a reconciliation between administration and payroll to ensure consistency of data between insured benefits and those being paid to members. Control this preventative control ensures individual policies are set-up accurately so that payments to your members are accurate when they become our policy holders. We raise any discrepancies with your administrator and manage these to resolution. 5 payroll and administration transfers to us All responsibility for the scheme transfers from trustees and your administrator to us. Our administrator issues P60s and annual increase notifications. They deliver a bereavement process to support those affected. They provide retirement options including triviality and tax free cash (PCLS) for deferred policy holders as they approach retirement. Our dedicated team are always available to help, whether that be with a small general enquiry or a more complex query relating to benefits or tax matters. 6 we commence ongoing monthly payroll payments We start payments to policyholders and issue P60s and annual increase notifications. We conduct quarterly mortality and HMRC sanction screening. Our administrator sets up and maintains individual policyholder payment records and makes payments to individual policyholders on the agreed date each month. Control these records are checked each month by our operations team to ensure they re correct before payments are made.

7 Defined Benefit Solutions 7 3 We issue annuity policy terms and the buy-out instruction to scheme lawyers for approval We check the annuity policy terms deliver the insured benefits and issue to your scheme lawyers for final review. This process is supported by our dedicated legal counsel, who are available to answer any questions that may arise. Control this ensures there are no surprises when the individual annuity policies are issued they re consistent with scheme rules and deliver the insured benefits. 4 trustees sign the buy-out instruction and we issue individual annuity policy documents tomembers You instruct us to issue the buy-out policies. We send insured members their annuity policy documents and they become policy holders of Just Retirement Limited (Just). Our dedicated team issue welcome packs to your members which include a welcome letter, their policy document and member guide, providing details about their policy and how to contact us.

8 8 Defined Benefit Solutions Support for you from transaction to administration We know that DB de-risking isn t something most trustees and their administrators do every day. That s why our team are specialists who focus on nothing else they know the process of buy-ins and buy-outs inside out, from transaction to ongoing policy administration. They re able to guide you and your administrator on the requirements of data cleanse and the benefit specification documentation. So we can move quickly to ongoing policy administration and, for buy-out, through to the issue of individual policies to members. How our expertise benefits you: We provide you with a single dedicated point of contact One of our experienced transition managers will be your sole point of contact to support and guide you throughout your buy-in or buy-out journey. We plan the process from start to finish so you don t have to We highlight the key milestones and dependencies throughout the process to help ensure it s efficient and transparent. We have extensive knowledge and experience We ve worked with most third party administrators and have an understanding of their current systems and processes so know how best to partner with them. We help your administrator We work with your administrator to advise them on the data cleanse process to minimise impact on you, and support them throughout the process. We report to you regularly We provide trustees with regular updates throughout the transaction process so you re aware of any progress, issues or delays. We provide a toolkit that can be shared with your administrator We can develop our toolkit of documentation, checklists or data/reporting templates to meet the needs of you and your administrator. We start with the end point in mind By kicking-off transition with an end point in mind, we re focused on achieving ongoing administration as quickly as possible. We ll create a bespoke and clear project plan and you ll receive detailed project documentation. So you know what to expect and can track the progress that we and your administrator have achieved. You can ensure key deliverables are on track, such as data cleanse, the agreement of the FDS and FBS and the true-up, and highlight to us any areas of concern. By kicking-off transition with an end point in mind, we re focussed on achieving ongoing administration as quickly as possible be that the agreement of and payment to you of the monthly payroll funding or the subsequent issue of individual policies where you re moving to buy-out.

9 Defined Benefit Solutions 9 Putting our policyholders first Support for policyholders Following buy-out, your members become our policyholders and our customers. With the Freedom and Choice changes to pensions legislation, the choices available are complex. So it s important we re able to support deferred policyholders and bereaved dependants to help them understand their options. Our policyholder helpline provide this service and can answer queries or deal with any issues, quickly and efficiently. It s managed by our administration partner and manned by our dedicated Just team who provide this service. They provide guidance, answer questions and point users towards other sources of information. They can t provide financial advice, this can only be provided by a qualified financial adviser. In addition to our dedicated helpline, we have dedicated and postal addresses so members can contact us using the channels that are easiest for them. All enquiries, no matter how they are received, are dealt with by the same dedicated team. We aim to respond to all correspondence within 5 working days of receipt and if the enquiry is complex, and cannot be answered in full immediately, our team will ensure the policyholder is kept up to date with progress along the way.

10 10 Defined Benefit Solutions Managing our administration partner To provide scalability for buy-in and buy-out, we ve secured a long term contract with an administration partner. We retain full responsibility and control of the services provided. We manage them with robust operational controls to monitor performance and have a relationship manager in place to oversee the contract and ensure service standards are met. They ve ring-fenced a dedicated Just team who view themselves as an extension of our operations team. They act with our service philosophy and culture in mind and employ our carefully designed, wellestablished and tested processes. We train this team to help ensure they deliver the focus and standards that we believe our customers require. They provide shadow administration for buy-ins and full administration, including a policyholder helpline for buy-outs. Service standards agreed with our administration partner The table below shows the key service level agreements we ve agreed with our administration partner: Member queries three working days Death processing five working days Payroll payments on agreed payroll date Pension increases processed ahead of payroll payment date Provide benefit quotations five workings days Pension put into payment on retirement date or within five working days of receiving all information Transfer quotations 15 working days Operational controls Annual state of the nation meeting Quarterly administration audits We monitor performance weekly so any issues are quickly identified and dealt with. Overall service including quality, customer compliments and complaints, new scheme implementation, compliance matters and any service trends identified are discussed and reviewed at regular monthly service review meetings. Quarterly auditing Weekly & monthly service reports Monthly service review meetings Quarterly risk reviews In addition to our regular performance statistics and service review meetings, we complete quarterly audits of our payroll and administration teams to ensure adherence to agreed process and check for quality and accuracy.

11 Defined Benefit Solutions 11 Improving administration standards We are a corporate member of The Pensions Administration Standards Association. They are the independent body dedicated to driving up standards in pension administration. This membership demonstrates our commitment to delivering administration excellence. Data security We are a data controller with rigorous controls in place to ensure data security. Data is transferred to our administration partner using secure file transfer and we use standard data templates to load and extract data. Internally, we hold all policyholder data on a secure server. Access is restricted to individuals who work within the defined benefits team and are managed by the Head of Operations. We have a strict data retention process which can be tailored if required for example if you need data to be deleted.

12 WHO ARE WE? Just Group is a FTSE listed specialist UK financial services company. We formed after the merger of Just Retirement Group and Partnership Assurance Group in The Group s Defined Benefit Solution team have been operating in the Defined Benefit de-risking market since We have a dedicated and growing team of pension de-risking experts to deliver our proposition. Just Group manage over 18bn in financial assets (as at 31 December 2017) and have helped more than 500,000 customers achieve an improved retirement. Just Retirement Limited were awarded an Insurer Financial Strength rating of A+ from Fitch in August KEY CONTACTS Heather Vaughan Head of DB Operations Heather.Vaughan@wearejust.co.uk Rob Mechem Head of DB Business Development Rob.Mechem@wearejust.co.uk Julien Smith DB Operations Manager Julien.Smith@wearejust.co.uk For professional financial advisers and pension trustees only. Not approved for use by pension scheme members, employees, or any other persons. Just is a trading name of Just Retirement Limited. Registered Office: Vale House, Roebuck Close, Bancroft Road, Reigate, Surrey RH2 7RU. Registered in England and Wales Number Just Retirement Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority / /20XX