Best Administrative Practices: Pension, Beyond the Basics. Presented by: Nadine Reynolds, VP Operational Support Group, AON Hewitt

Transcription

1 Best Administrative Practices: Pension, Beyond the Basics Presented by: Nadine Reynolds, VP Operational Support Group, AON Hewitt

2 Best Administrative Practices Pension & Payroll Integration & Processes Prepared by Presentation to Canadian Payroll Association

3 Agenda Evolution of Pension Administration Integration with Payroll Activities The Administration Equation What is a Best Practice? Regulatory Environment Evolving Member Needs Point of View/Communication Strategy What does Success Look Like? Q&A Proprietary & Confidential 2

4 Pension Administration Evolution The Paper Era. Actuary Proprietary & Confidential 3

5 Pension Administration Evolution The Excel Era. Proprietary & Confidential 4

6 Pension Administration Evolution The Website Era. Proprietary & Confidential 5

7 Pension Administration Evolution The Integrated Era. Data Feeds Member Self-Service Website Mobile Call Centre Tools Call Centre Desktop Call Centre Recording Workforce Management Pension Administration System Case Management Tool Plan Knowledge Tool Plan Sponsor Portal Communications Call Centre Imaging Pension Payroll Functions Proprietary & Confidential 6

8 Pension Administration Evolution The Behavior & Analytics Era. Proprietary & Confidential 7

9 The Pension Administration Equation New legislation + new legislative guidance More communication, different channels how early do you start and what do you cover? Different channel choices, deeper level of education required... What is success members understanding their compensation or pension? Understanding they need to save more? How far do you go? Proprietary & Confidential 8

10 Pension & Payroll Integration Incoming Data: Payroll Feeds/API s & Reconciliation Pensionable Earnings Indexed Earnings Contributions closed loop? Applying Caps to earnings/contributions Service determination Outbound Payments: Pensioner Payroll including Tax Updates Gross to Net Calculations Remittances/Tax Slips Deductions, Garnishments, Wire Transfers Reconciliations Proprietary & Confidential 9

11 What is a Best Practice? A point of view which is legislatively compliant backed up with strong data & analytics. which continuously evolves based on member behavior, industry trends/needs and produces efficient results. Proprietary & Confidential 10

12 What is a Best Practice? Discussion - Examples Proprietary & Confidential 11

13 Regulatory Environment Do I need to follow strict legislative guidelines? What about the grey areas? How do I implement and operationalize guidance? Can I take some risks? How can I innovate where regulations are still in the stone age? Proprietary & Confidential 12

14 Regulatory Environment Legislation How can I reach members in an impactful way? How do I balance risk? Innovation Proprietary & Confidential 13

15 Regulatory Environment Discussion Examples Pensioner Audit Electronic Communication Tax Slip Distribution Refer to Scorecard 1 Proprietary & Confidential 14

16 Regulatory Environment ECA Requirements The ECA essentially makes electronic documents and electronic signatures legitimate from a legal perspective (subject to certain exceptions and requirements). For the purposes of pension communications, we can glean the following requirements/tips from this legislation: express or implied consent is required keep evidence of transmission ensure privacy laws are still respected members will need to be able to save, print, download the information Electronic Communication Between Plan Administrator and Plan Beneficiaries: the plan beneficiary receiving the communication must designate an electronic medium, such as providing an address consent or deemed consent may be revoked at any time by advising the administrator in writing or electronically the electronic communication itself must be able to be printed and retained by the plan beneficiary plan administrator is not discharged of the duty to provide the document/information if it receives a message that the electronic communication was undeliverable, or if the administrator knows that for any other reason, the member will not be able to receive the document through the electronic means previously provided (i.e. if s bounce back, will need to send a paper copy or find another acceptable means for sending the document/information) Proprietary & Confidential 15

17 Your Regulatory Scorecard How Conservative Should You Be? Our regulatory approach: We have a point of view on the grey areas of administration. nowhere there Our regulatory approach: Willing to take some risks in the grey areas as long as other plans are doing it first. We look beyond just the legal requirements when determining a best practice (e.g. cost, member /employee experience). nowhere there Our regulatory : We will go above and beyond to ensure that there is a good balance between the regulatory, cost and member experience. We look across multiple jurisdictions to identify trends and risks. Trend setter. nowhere there Proprietary & Confidential 16

18 Evolving Member Needs How do I anticipate evolving member needs? How much education am I required to provide? How much education should I provide? How do I draw the line between advice and education? How do I keep up with the ever-evolving technology demands and channel choices? Proprietary & Confidential 17

19 A Changing People Landscape 30% 25% 20% 15% 10% 5% 0% Percentage of Workforce Age 55 or Older 14% 2006 (actual) 24% 2031 (projected) 40% 30% 20% 10% 0% Percentage of Workforce Foreign Born or Visible Minority 22% 16% 33% 34% 2006 (actual) 2031 (projected) Foreign Born Visible Minority Baby Boomers Generation X Millennials Generation Z Older 1 in 4 Workers 55 or older in the future workforce More Diverse 1 in 3 Workers who are visible minorities in the future workforce New Values 2025 Millennials fill the middle management ranks Proprietary & Confidential 18

20 Channel Choices Proprietary & Confidential 19

21 Education & Making It Easy: From understanding your compensation to understanding your pension Educating people who are going from pre-retirement income (payroll/comp) to post-retirement income (pension) Proprietary & Confidential 20

22 Evolving Member Needs Discussion Examples Member Savings Make it Easy does it apply to pension? Refer to Scorecard 2 Proprietary & Confidential 21

23 Evolving Member Needs Member Savings: 1. Pension Plan Estimate. Formula breakdown Optional form explanation Different Ages Inflation? 2. Replacement Ratios? 3. Government Benefits? 4. Other Member Savings (e.g. RRSP, etc.) 5. Spousal Savings (e.g. Spousal RRSP) 6. Expenses (model and tie into replacement ratio). Proprietary & Confidential 22

24 Your Evolving Members Needs Scorecard Our member experience approach: We provide clear, concise information about our compensation and pension programs. nowhere there Our employee experience approach: We try to give our employees/members tools to encourage them to get more educated about their compensation and retirement savings beyond just the pension plan itself (e.g. incorporating government benefits, etc.) nowhere there Our employee/member experience approach: focused on proactively communicating and driving specific messaging to make it easy for people to save. nowhere there Proprietary & Confidential 23

25 Point of View/Communication Strategy What if you take a point of view and you don t get the results you expect? How do you get everybody to agree on the point of view? How do you get your employees/members engaged in the communication you are rolling out? How do you meet the regulatory requirements while keeping communication clear and easy to understand? Proprietary & Confidential 24

26 Point of View/Communication Strategy Discussion Examples Overpayments Statements Refer to Scorecard 3 Proprietary & Confidential 25

27 Your Point of View/Communication Scorecard Our administration: Leverages some best practices. Has a communication strategy. nowhere there Our administration: Has a multi-channel communication strategy where members will have the same experience no matter what channel choice they take. Has taken a point of view on some strategic grey areas. nowhere there Our administration: Has a clearly articulated point of view supported by best practices which continuously evolve. Our communication strategy evolves based on trends/feedback from employees/members. nowhere there Proprietary & Confidential 26

28 What Does Success Look Like? Let s look at the administration equation again.. Proprietary & Confidential 27

29 The Administration Equation Take a point of view. You can still respect the regulation. Evolve try new things get passionate about communication. Offer channel choices go beyond requirements Define success for you as a plan sponsor. Proprietary & Confidential 28

30 What Does Success Look Like? A point of view which is legislatively compliant get legal input backed up with strong data & analytics. which continuously evolves based on member behavior, industry and produces efficient results. trends/needs Proprietary & Confidential 29

31 Create a Pension Analytics Culture to Make it Easy Leverage Data & Facts to update best practices Adaptable & Flexible Technology Root Causes & Unseen Issues Tell Stories Through Numbers Measure Outcomes Define Interventions Proprietary & Confidential 30

32 Your Analytics Scorecard Our data is: accurate, comprehensive, consistently defined and understood accessible to plan sponsors nowhere there Our analytics approach: produces sophisticated easy-to-understand dashboards involves deep research to answer key member behaviour challenges, and integrates call centre, web, print data to drive analyses and outcomes nowhere there We have embedded analytics by: Determining best practices using data and analytics Predicting employee/member behaviour and proactively communicating based on pension analytics. nowhere there Proprietary & Confidential 31

33 Questions Proprietary & Confidential 32

34 Thank You for Participating Please remember to complete your evaluations.