Migration programme setup and delivery

We supported a large pensions scheme to successfully restructure their operations and support the introduction of a Defined Contributions section

The challenge

The client is a large private open Defined Benefit pension schemes in the UK (£50bn+) with 300,000+ members across 370+ institutions

Several years earlier, the Final Salary (FS) section of the scheme had been closed to new members but the DB scheme continued to run at a funding deficit which led to the trustees having to consider the options for the scheme, including the possible introduction of a Defined Contribution (DC) element

All administration was undertaken in-house using a third party software solution which would need to be reviewed to determine its suitability with the proposed scheme structure and desired operating model

The changes to the scheme rules and structure introduced the need to build a new investment platform, launch a number of new funds as well as offering the opportunity to improve the member experience and demonstrate improved value for money

Timings were tight – the consultation around the scheme concluded in August and the desire was to launch the revised scheme structure in line with the start of the tax year

With 380,000 members of the scheme, employed by 370+ institutions, the amount of consultation and communication required was an enormous challenge

This was the biggest amount of change that the client had ever experienced and as such, PEN were engaged to support a number of key areas on the programme

Our approach

The support PEN provided covered the following:

  • Producing the outline proposition structure and overview of options available for the new DC section
  • Overview of the operating model options available to support the engagement of technology and investment partners
  • Designing and managing a competitive selection process for the third party administration (TPA) partner
  • Definition of the target operating model (TOM) and identification of the key gaps with the current operating
  • Programme and governance restructured with clear lines of responsibilities and reporting, introduction of Design Authority and rigorous change control function
  • Programme Management of the key events including the largest private pensions data migration, new platform implementation, Web site and contact centre delivery and the new DC Investment Builder product. 

The outcome

  • Successful launch of the revised scheme structure including the introduction of a new DC section to create a hybrid DB-DC scheme
  • Full market assessment of potential administration platform partners undertaken and agreed short-list of 2 suppliers reached within 4 months of an RFP being issued
  • Commercial heads of terms negotiations between the two suppliers completed in months
  • New operating model defined and implemented incorporating a third party back office operation to support the DC element of the scheme
  • Successful migration of 380,000 member records from the old to the new administration platform
  • Contact centre for members launched within 6 months to support DC related queries
  • New web portal launched allowing members to log on and self service their investments for the first time in the clients' history
  • 16 new funds launched to support the member DC elections