Paperless Pensions, Barnett Waddingham

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  • 07 mins 19 secs
Richard Mountford-Williams, Client Account Manager, Barnett Waddingham sits down with Mark Colegate to talk about the evolution of paperless pensions, the data that proves the older generation are turning to the internet and the potential risks that come with this move.

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The Pensions Management Institute



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The Pensions Management Institute
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Mark: Richard Mountford Williams is client account manager, part of the pensions administration team at Barnett Waddingham, he joins me now to discuss the move to paperless administration. Well Richard, we're hearing so much about people going paperless, going digital. What exactly does it mean? Are they the same thing?
Richard: Effectively? Yes. Going paperless, going digital, however you refer to them, they're just two slightly different terms for the same process, and the outcome is exactly the same. Going paperless is the term that I'm more familiar with, and certainly the phrase that I hear banded around the industry more, more so. But you're quite right both are terms that we're hearing more of. So, what do they mean? Effectively, exactly what they imply. Trustees are looking for more effective means of communicating with their membership and in light of the current economic and environmental concerns around the globe, reducing the amount of paper that they use is seen as a step in the right direction. So, whether it's going paperless, reducing the paper that they use, going digital, increasing their digital communication, the outcome is exactly the same. Technology is moving very fast and trends are constantly evolving to try and keep up. So much so that digital communications are being used in every aspect of our day to day interactions, e-mails and messages have already replaced pen and paper letter format because they’re simply more efficient means of communication. We're familiar with utility providers and financial organisations that only operate as online providers. So, if a member wants to view their policy documents or access the communication, they have no option but to log on to the website. So, it seems only logical that trustees start to consider offering or providing an online portal for their membership where they can actually go online.
Mark: I get the long-term changes that are taking place. But what's gonna make trustees make that switch to digital or paperless right now?
Richard: There is an un-surprising yet significant appetite from members for paperless communications and online delivery in general. But in the main, it's been trustees that have delayed the rollout of the digital approach due to concerns around both cyber security and, of course, the quality of the member data but also in part, the concern about losing that all important personal touch. Trustee boards tend to be older, with some already retired pension members who are less likely to have used digital formats throughout their working career. But times are changing, and we're starting to see more of the older generation using the Internet. So much so that the O and S produced a report in 2019 which showed the number of pension age adults accessing the Internet massively increasing, the number of adults aged between 65 since 74 using the Internet increased from just 52% in 2011 to 83% in 2019. Likewise, adults aged 74 and over using the Internet was just 20% in 2011. That's increased the 47% in 2019. So, we have evidence that shows the older generation are using the Internet more and more. A general consensus shows that trustees are now more open to the digital approach, so much so that we're seeing more trustees request meeting packs and trustee specific documents loaded onto the online portal, so it's not surprising that they're starting to see the efficiencies from paperless communications. Trustees and administrators will always be cautious about the risks of cybersecurity, and but we believe that we've got adequate protections in place, fraud will always be easier to perpetrate. But we believe that there's more risk involved with paper mailing.
Mark: You’ve talked there about the backdrop but talk us through specifically some of the real advantages of going paperless. The obvious advantages are the reduction in paper as well as the printing and postage costs that the trustees will see as well as the environmental impact. It provides a secure access to online platforms for members reducing unsolicited mail. It was also the speed of communication and there’s instant access to immediate information, almost anywhere in the world, it retains a link to the member, which often gets lost if a member moves house and fails to notify us of a change of address and then, importantly, it provides an online library for members where they can access both scheme and individual information which reduces the amount of paper and clutter around the home. So, we believe there’s quite a few advantages.
Mark: What the main potential disadvantages of going paperless, though?
Richard: We already discussed the risks involved with cybersecurity and we hear in the press about security fraud and ID theft, but we believe with the relevant built in security protocols, we can provide a good protection against hackers and also an adequate protection of member data. Another disadvantage with digital communications is that electronic communications can be less reliable. We've got spam filters and junk mail, and you can easily lose those notifications.
Mark: Given this greater efficiency that you've been talking about. Surely this means admin fees are gonna be coming down for trustees?
Richard: I think trustees can expect to see a definite reduction over the long term, but due to the legislative requirements, there are going to be some larger costs initially as a result of issuing multiple communications. But if trustees can link one of those communications with an already scheduled mailing, then they can help manage their costs in respect of that, going forward trustees can also expect to see large printing savings in respect of all their annual mailings, benefits, statements, newsletters, et cetera, as well as the associative postage costs that come with that, and it goes without saying that the bigger the membership, the bigger the saving.
Mark: Is there an option, for those members who really like postal correspondents to still receive it?
Richard: Yes, legislation requires the trustees to give the members the option to opt out at all opportunity and then also further down the line, if members want to change that preference, they have the ability to do so. So, it's not an all or nothing and then also may not be at the initial implementation, but further down the line members will have or have seen that members have the option to self-manage their preference where they can manage the type of communication that they wish to see by both digital and paper communications.
Mark: We’ve covered a lot in the course of this interview, just sum it up, what are the next stages for going digital or paperless if you're a trustee?
Richard: Well, going paperless is just the first step in a 100% digital approach. Trustees are starting to look at issuing communications in a digital format. They need to now consider how members can respond. At the moment, members will have to print, complete, and return paper copies. We want to make the most of modern technology and allow members to complete their forms and verify their identification online. That way, a member can completely retire and take payment of their benefits without a single piece of paper being issued.
Mark: Richard Mountford-Williams, thank you.
Richard: Thank you