Five tips to ensure a smooth transition to outsourced pension administration

Your organization has made the business decision to outsource your benefits administration. So now what? You may be dreading the upcoming and likely unfamiliar process while at the same time dreaming about the day you are able to hand off the day-to-day responsibilities of plan administration. Those responsibilities can include a day with a fully staffed call center to field participant calls; a user-friendly website for participants; and a team of benefit professionals dedicated to providing exceptional service to you and the plan’s participants.

As with many things in life, it is all about how you get started. The effort and attention given during the conversion process can set the stage for proper and efficient administration in the future. The conversion team of your selected vendor will have a well-defined process designed to streamline the administration of your plan, but you and your staff will be a key factor in facilitating the achievement of this goal.

Here are five tips to ensure as painless a transition as possible for you, your participants, and your new plan administrator. 

  1. Gather and organize plan information  
    Once a new administrator has been selected, begin to gather the information needed to administer your plan(s). For defined benefit (DB) plans, this includes plan documents and amendments, summary plan descriptions, and recent valuation files and sample calculations. Determine data sources needed for both historical and ongoing needs. Identify required interaction with other service providers—your payroll vendor, check writer, and actuary. It’s also important to provide details regarding any upcoming plan changes if any are being considered. This part of the process can be the most labor-intensive for your benefits team, but it is also the part that will allow for the greatest success.       
  2. Be clear about your current challenges
    You know what makes your plan(s) challenging to administer. Share your pain points and be specific about your expectations of the new system. Do you have manual processes that could be automated? Are there certain groups of employees or participants that will be sensitive to any changes? Do you have concerns about missing data? Making sure your current challenges are outlined clearly will help your new administrator determine the best solutions.
  3. Be open to changing existing processes
    It can be uncomfortable, but don’t let “we’ve always done it this way” prevent you from benefiting from possible process improvements. Explain your business needs clearly, and allow your new administrator to share best practices. They will thoroughly review and analyze all current administrative processes and procedures and make recommendations for effectively streamlining when appropriate. Look at this as an opportunity to make things easier for your organization and your participants while increasing efficiency and managing costs.
  4. Actively participate in the process
    You will be involved in status meetings and process discussions throughout the conversion project. You will be asked to review new communication materials and, most likely, a new participant website. Your attention and participation in the process will be vital to the successful delivery of the services at the live date and beyond. You know how your plan “works” and what your participants will expect. Participating in the review of the setup will provide confidence that your plan will be administered in the proper fashion and that the plan’s participants will be comfortable with the transition.
  5. Share concerns as they are identified
    Open communication with your new administrator will be key to a successful transition. The conversion will typically be a project lasting several months, and you will likely have questions along the way. If there are decisions being made that you disagree with and/or think are confusing, bring that information to the team’s attention. Be open with your conversion team so that it can address concerns and make adjustments as needed. Turning over the administration of your plans(s) can be a daunting task and you should be comfortable with the assigned benefits team to provide you assurance that your plan is in good hands. Following these tips will help set the stage for a true partnership with your new vendor to administer your plan(s) in the future. Your participation in the conversion process will allow you to be confident that the plan will be administered properly and efficiently and that you will arrive at the live date with certainty.