Insight

The Value of Having an Implementation Partner for Canadian Pension Plans

BY
Kevin Lynch and Vincent Houle

As pension administration consultants, we’ve implemented systems that provide pension benefits to many organizations across North America. In the process, we’ve learned that the staff of these organizations are often overwhelmed by the thought of going through an implementation of this size and complexity. For most, this will likely be the only time in their career that they undertake this type of endeavor. We’ve completed organizational assessments, analyzed processes, defined requirements, assisted with procurements, performed change management, and worked with Pension Administration System (PAS) vendors and clients in implementing these systems. We believe that the ultimate goal of modernizing a pension system is to better serve membership by helping staff be more effective, increase the role for external stakeholders, and improve the efficiency of the plan.

Because pension modernization initiatives are very complex, and often are business transformation projects, we see many US pension plans use the services of an implementation partner, like Linea Solutions, to guide them through this strategic initiative. Typically, these implementations are a significant investment financially and operationally. They involve converting all the work histories of members – including detailed compensation, employment history, contributions, service breaks, plan history, buybacks, and their complex rules– in order to calculate pension entitlements. Additionally, we’ve seen a rise in ancillary capabilities being integrated with the core PAS; Member/Employer portals, workflows/CRM functionality, and Document management are all capabilities now being integrated to better serve membership. Failure in any of these areas can lead to a reduced service level for members and employers.

Below are four examples detailing how an implementation partner can ensure a project is successful.

Future State Design

Frequently, the engagement of an implementation partner in all facets of modernization is common. For the purposes of this discussion, we define modernization as any initiative to improve systems and/or processes. An implementation partner using its experience can help with future state design as well as analysis of the current system based on their understanding and knowledge of many funds’ practices and systems. Thoughtful analysis and deliberation on the desired future state is essential to maximizing the benefits that can be achieved from the evolving offerings of PAS vendors. Additionally, it’s very important to avoid simply repeating the same processes that have existed for years.

Optimize Staff Efficiency

One of the biggest challenges of staffing PAS implementation projects is hiring to augment staff for the two-to-five-year implementation period. Hiring temporary skilled staff is difficult, especially in today’s economy. By hiring an implementation partner, an organization can ensure specialized, qualified, and knowledgeable resources available for projects. While some organizations may engage their own project manager and have the best intentions to either augment or segregate portions of staff to support a pension implementation, ultimately staff may become overwhelmed and either lose efficiency or start to cut corners due to the complexity of the project.

As most staff members have not experienced a PAS implementation, they might be uncomfortable in writing requirements, knowing how to test, being system experts, and understanding the impacts of their decisions. An implementation partner has consultants that have gone through multiple implementations with experience in each of the aforementioned areas. With our experience we understand the scope that is required for these large implementations. To complete the scope of work in these projects, we frequently assist clients directly with additional consultants and train clients’ staff on key areas like design confirmation and testing.

Market Knowledge

As an implementation partner, we have experience with all vendors in Canada and theUnited States, and our services can be leveraged to impart that knowledge.Every vendor has strengths and weaknesses, but with our experience we can help pension plans focus their time in finding the ideal vendor for their specific situation. Vendor management is also a key component in managing costs and decision making; the implementation partner will be able to tailor their approach to maximize the efficiency and quality in working with any given vendor. Finally, having a 3rd party point-of-view can help balance the discussion and ensure a productive working relationship. Our approach to determining the right vendor is to not only vet the solution but ensure the resources a vendor proposes have the appropriate expertise and are a cultural fit.

Industry Best Practices

By leveraging the implementation partner’s experience to understand what is standard in the industry as well as new trends, an organization can ensure that all possible options will be considered. This spans across the entire spectrum of pension administration from cybersecurity, pension payroll, integrations, administration best practices, communication best practices, project management methodology, data conversion strategies, infrastructure setup, etc. For example, some clients tend to look for an all-encompassing solution, while others want best of breed with multiple components.

It is evident that pension plan administration is complex on its own, without trying to implement new systems and processes. Having an implementation partner in place for that journey will help mitigate costs, minimize risk, reduce stress on staff, and ultimately lead to the implementation of a solution that efficiently serves constituents.

Have questions? We can help.

Linea Solutions has been providing strategic guidance that has improved our clients for almost 25 years. We would be happy to meet with you virtually to discuss what type of assessment would be ideal for your organization. If you have questions about the best way to improve your organizational efficiency, contact us to see how we can help.

Have questions? We can help.

Linea Solutions has been providing strategic guidance that has improved our clients for almost 25 years. We would be happy to meet with you virtually to discuss what type of assessment would be ideal for your organization. If you have questions about the best way to improve your organizational efficiency, contact us to see how we can help.

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