The Pension Protection Fund (PPF) set out its first consultation document on the pension protection levy last month, introducing a risk-based levy to occupational schemes.

The pension protection levy consultation document has been met with a lukewarm response from the industry, with financial problems for smaller schemes being a widespread criticism.

The Department for Work and Pensions (DWP) is reviewing how it estimates the number of people who are eligible to claim the pension credit, the government’s flagship policy on pensioner poverty, following worries that the current figure is overstated.

Since the Pension Protection Fund (PPF) was set up in April, 10 pension schemes have entered into an assessment period.

David Blunkett has given further government support to the idea of automatically enrolling employees in company pension schemes where they are available.

While Messrs Blunkett, Rifkind and Laws trade blows during the summer over compulsion and simplification, the battle will not begin until after the Turner Commission delivers its report in the autumn, says Ralph Jackson

A Court of Appeal ruling last month saying that trustees could demand lump sum

Despite a Thomson Extel and UKSIF survey revealing that 92% of leading fund management firms expect their involvement in socially responsible investment (SRI) to increase, many fund managers are concerned about a lack of transparency, valid data and research with SRI funds.

The largest UK pension schemes are now too big for them to be able to buy out their pension scheme obligations using a bulk non-profit annuity buyout according to the two life companies that are still operating in this market.

Due to a technical glitch beyond their control, Scottish Equitable did not get a return into the annual Sipp survey in June’s PM. For more information, go to www. scottishequitable.co.uk.

Australia, the cradle of compulsion and the regime that the US government is closely examining with the UK as a model for its social security changes, may be entering a period that could damage the industry and leave some consumers high and dry.

Forced retirement before the age of 65 will be banned under new age discrimination draft regulations.

Insight Investment has launched a European real estate trust, signalling expansion of its property business into Europe. The fund has a target size of E600m and will acquire commercial property in western continental Europe.

Norwich Union (NU) has reversed its policy towards commission on stakeholder pension (SHP) products.

The Institute of Actuaries (IoA) proposals to amend pension transfer values are unfair and will penalise members who remain in an occupational scheme, according to pension consultant First Actuarial.

Pensions Management’s dedication to the delivery of high quality news and information to its professional readership was rewarded at the 22nd Aon Consulting Pensions & Investment Journalist of the Year awards.

Anglo Irish Assurance has selected Financial Risk Solutions’ fund administration system InvestPro to administer all its life and pensions funds including unique and syndicated portfolio business.

Concern over tax simplification has been growing amid fears that the proposals have not been scrutinised properly, will not be ready in time, and that many parts of the Finance Bill 2005 are still confusing.

The Financial Assistance Scheme (FAS) is just one of a host of changes and new ideas introduced by the Pensions Act 2004. It provides protection for members of underfunded schemes whose benefits are unlikely to be met in full, where the scheme started to wind-up before the introduction of the Pension Protection Fund (PPF). The government is committing £400m to the FAS over 20 years.

Pensions investors will have to move fast to take advantage of some of the more generous A-day amendments before the government changes the rules to limit tax relief.

When you talk to people working in pensions about simplification they tend to fall into two broad camps. There are the wise owls who know what they have to do for A-day, have plans in place to deal with it and are thinking about longer-term strategic issues beyond it.

Insurance companies should be penalised under the ‘treating customers fairly’ (TCF) initiative if they take too long to process transfers or pay benefits, according to participants in this month’s self-invested personal pension (Sipp) roundtable (see pages 37 to 44).

As part of a £7m investment programme to enhance service capabilities in readiness for the the post A-day market, Capita PPML has changed its name to Capita SIP Services.

Many schemes currently provide a small lump sum (of up to £2,500) as a funeral grant on death after retirement. This is permitted under current Revenue rules, irrespective of when the member dies.

Benefit Consulting Services, the parent company for Paymaster, Claybrook and Entegria has been renamed Xafinity, following an internal staff competition to come up with a new name for the

Changes to the rules surrounding early leavers of occupational schemes could cost UK businesses up to £430m a year post A-day and push more employers to close their schemes, according to one financial planning firm.

If nothing else, I think that A-day is a great chance to tidy up a client’s pension plans.

If this issue of PM reaches your desk at the start of August, there could still be just enough time – just – to get in an entry to this year’s PM Scheme Awards.

The third annual Pensions Management Technology Awards for 2005 has been judged and the results are now available in the Guide to Technology supplement that you should have received with this issue of PM.

Judging is underway for the seventh PM Admin & Service Awards.

With the Pensions Management Scheme Awards for 2005 fast approaching, now is the time to review the awards categories that haven’t been covered in the last two issues of PM.

Although welcoming the guidelines for trustees, Penny Green says the message that trustees know what they are doing has obviously not filtered through to the government. She talks to Ruth Emery

A survey of more than 400 adviser firms has shown that enormous variations in the quality of providers’ online services is one of the biggest factors affecting advisers’ decisions to adopt e-commerce, says Shaun Crawford

David Trenner answers this month’s G60 questions on the options available to a pensioner about to turn 75 who wants to provide for his wife after his death, as posed by the following case study

With the current version of this popular annuity being closed to new purchasers from A-day, Ken Wrench urges IFAs to make sure their clients aren’t missing out on a very good thing

A bit like waiting for a bus is one way to describe the bulk buyout market, as nothing happens for ages and then everything seems to arrive at once.

Scheme-specific funding is the latest in a long line of rules re-defining the responsibilities of employers and trustees. Ian Aley reviews some of the investment options that are available to meet their funding requirements

The need to ensure that assets work as hard as they can makes currency management a vital component of investment strategies of all sizes, says Marek Siwicki

The reality of an all-inclusive, technology-based aggregation service to view financial portfolios is still a long way off, but progress has been made in some previously untapped areas, says Peter Brutin

Matthew Craig, editor-in-chief, Pensions Management and Pensions Week: What particular concerns do independent financial advisers (IFAs) have at the moment with self-invested personal pensions’ (Sipps) administration?

While on safari, Oscar Patterson gets his ear chewed off over mandatory member-nominated trustees by Fletcher Blink, self-appointed king of the professional trustees, who fears for his continued existence, Neil Smith writes

1. There are five ways:
   - Research: Finding out how you communicate now and how effective it is.
   - Segmentation: Identifying your audience – and really understanding their needs and motivations. Segmentation should be both logical and practical, but if possible based on factors such as personal situation or attitude.
   - Vision: Define the desired environment and behaviours you want to achieve, from both your perspective and your employees’.
   This will enable you to craft specific and targeted key message.
   - Planning: Effective communication requires a formal process or ongoing plan.
   To keep employees engaged, it should be a continuous cycle of improvement based on feedback.
   - Measurement: Use your research as base-line data to measure the effectiveness of your communications. Listen to feedback and learn from experience.
2. Technology enables much more interactive and immediate communication, for example web casts and online surgeries. It also gives members access to tools that help them make informed decisions, for example online administration allows members to take control of their pension; modellers linked to personal data make pensions ‘real’.
   Watson Wyatt’s own communication research identified nine key elements that make communication effective. Leveraging technology is a key part of good scheme communications, but it should not be seen as a panacea.
   There is no substitute for face-to-face communication. And people still like the security of receiving hard copy that they can keep.
3. Employers should see the act as a golden opportunity to shift employees’ perceptions and beliefs around pensions, and enable them to take responsibility for their retirement savings, rather than viewing it just as another legislative burden.
   The finance act and the pension act combined provide members with much greater flexibility on how they save. Good communication can bring these changes to life and will enable employees to truly take control of their pension.
4. However you decide to communicate, your strategy must include robust feedback mechanisms. That will enable you to adjust the style and content of future communications to meet the needs of employees as they become more pensions aware and their needs change. Building on the data gained in your initial research, you can measure communications in many ways, for example:
   - Surveys – online, paper-based or telephone Focus groups – consider setting up a pensions user group
   - Web polls – a quick and easy way for people to see how they compare with their peers and for employers to obtain simple feedback
   - Dip checks – quick solutions such as mini surveys or telephone surveys can help with short-term assessments to ensure that communications are on track
   - Informal feedback – the quick chat by the coffee machine can provide a wealth of feedback on any current initiative.

1. The most important point is to establish the objectives of the communication. This could be to encourage new members, to increase awareness, appreciation and understanding of the scheme or to communicate change.
   In all cases, it is essential to identify how you want people to respond and formulate the best possible strategy to achieve that response. The other critical factors are:
   - understand your audience;
   - build upon previous successes and learn from any failures;
   - set a budget at the outset so that best use can be made of existing resources.
2. What is important is the appropriate use of technology for the audience. Allowing members to look up and amend their pension records and model their benefits via the internet or an intranet is an excellent idea, as long as members have suitable computer access.
   Unfortunately, a lot of money has been spent on technology that people do not use. Therefore, it should be used in conjunction with other forms of communication and education.
3. One potential outcome is that pension communications will become increasingly educational as well as informative.
   An ideal way to tackle this is via benefit statements – the only personalised communication members receive and key to improving understanding.
   For those schemes that do not communicate regularly with members, this is a good opportunity to open the channels of communication. There is plenty to be done and it needs to be planned and budgeted for.
4. By asking for feedback. This can be done via focus groups, member research or informally. In addition, where there is a clear objective behind the communication – ie, a specific response is required – the size of this response is the best measure of the effectiveness of the exercise.

1. The first, and perhaps most important, element of any communication strategy is an objective analysis of the key audiences and their respective needs. On too many occasions a broad brush, one-size-fits-all approach is adopted.
   It is only once you understand who your audiences are that you can consider how best to deliver the communications message. These days, there are a myriad of traditional print and new media options to choose from.
   Assuming a successful implementation stage, it is then essential to measure the effectiveness of your strategy. Of course, this is not the end of the process but a new beginning as the whole review-produce-measure cycle starts again.
2. Technology is becoming an increasingly important part of any scheme’s communication strategy. It avoids many of the limitations of traditional printed communications. For instance, web-based solutions are easier to update enabling schemes to be proactive and more efficient.
   Some of technology’s own, inherent weaknesses are disappearing over time as broadband usage grows and access widens.
   In considering any communication strategy, it is still important to use a variety of media, especially if any employees would be disadvantaged by a technology-biased approach.
3. No-one who works in the pensions industry is a stranger to change. The latest rounds of legislation from the new pensions and finance acts are just the last in a long list.
   In communications terms, it is not really the legislation but the decisions schemes will need to make to accommodate the changes that will impact on scheme communications.
4. There are many ways in which schemes can measure the effectiveness of their communications. On one side, you can speak to a few members informally through to the other extreme of conducting a company-wide employee survey (be it by post, telephone or online).
   Again, technology can play an important part here too as statistical analysis and reports can be automatically generated.

1. In Axa’s experience every communications strategy will be unique as employers will have different commercial objectives. Their pensions legacy will be unique as will the demographics and requirements of their workforce. So the core elements will be delivered to order based on the objectives and history of the scheme.
   Certain elements are key, for instance it is vital for a successful strategy that the employer devotes sufficient management time and resource to driving the campaign internally. For Axa, understanding the employer’s objectives is most important.
2. This depends on the client. Many solutions are promoted utilising technology but this is often driven by the communications firm or provider having internal cost challenges or resource issues.
   The best schemes utilise a mix of media including technology such as web-based tools and interactive discussions, but many employers and even more employees prefer face-to-face interaction. This is the single most effective communication technique. Talk to the people.
3. There is a raft of regulation hitting employers at the moment. The biggest one for us, is the introduction of age discrimination legislation. Let’s paint a picture of an ageing workforce with poor pension provision, there will no longer be a fixed retirement age. So the employees will not be able to afford to retire.
   For some employers this will reduce their competitiveness over time and will focus the mind of employers in ensuring that the pension scheme is used as a business tool. By communicating on an ongoing basis employers can manage this risk.
4. Employers need to understand the perception that employees have of their pension scheme. Very few employees can tell you how much the employer contributes, whether it is defined benefit or defined contribution, which fund they are invested. Historically this has not happened although some firms are becoming better at this through the use of employee questionnaires and other methods.

The questions:

Laverne Hadaway considers some of the challenges for companies looking to tell their pension scheme members about A-day and the consequent changes to their schemes

Before an employer can begin to communicate the benefits of its pension scheme to employees it must understand clearly the objective of having the scheme in the first place, writes Mark Rowlands

If employers are to encourage employees to join their company pension scheme they need to assess what form of communication works best for their staff and tailor the information accordingly, says Gary Smith

Chris Hartley takes a look at the global bonds market and points the way forward for investors as borrowing costs move higher and yields begin to fall

1. Some people might think that a footballer being paid £100,000 per week should not make mistakes, but he does. Judges make mistakes, lawyers, journalists, doctors and so do pension administrators. My guess is that there are a lot less mistakes made in pensions than many other professions but, in my experience, when they do occur they arise from people not concentrating on the matter in hand or from being put under pressure. If pensions work and activity was distributed evenly day by day there would be less likelihood of mistakes, in my view, but life is not like that.
2. I have worked in pensions since 1965 and administrators have always done their best.
   I think the biggest improvement in performance comes when standards are measured and where additional resources (for example, more people/technology) are allocated to improve performance. I do not believe the Pensions Act 2004 will have as big an impact as the Pensions Act 1995 or contracting-out in 1978 did in improving administration standards. The new legislation will improve security for members but that is a different thing.
3. Technology is both a good thing and it is not. In the days before computers, when pensions and actuarial valuations were calculated manually, it was hard work, but everyone understood the underlying principles and processes.
   Now, the number-crunching is done by computer which saves a lot of graft but administrators do not always know the underlying principles so that we have problems when technology lets us down. Of course, I’d vote for new and better technology every time but lets not kid ourselves that it does not bring new problems to deal with.
4. Some initial fresh work for sure – but eventually we should all be able to settle down to the benefits of a new simplified regime. If I was not intending to retire first, I would be looking forward to it. Honest.

1. Two main reasons are lack of resources and lack of interest by trustees. Administration has not been seen as a sexy part of pensions and so has attracted little interest in many schemes. In DB schemes especially, the problems caused by poor standards can remain buried for many years, and often only surface when a scheme is wound up.
2. As trustees get more involved and knowledgeable, standards ought to rise. There is still a danger though that other issues will be given higher priority. It is not clear what the driver will be to better administration especially as there will not be the same imperative to get scheme records right for schemes going into the Pension Protection Fund (PPF) as there has been for schemes in winding up.
3. By achieving greater consistency and enabling better communication with members.
4. Initially, the impact of A-day may be a deterioration in admin standards as schemes struggle to implement new processes. A-day will be an opportunity to review benefit structures and the system changes this may require will also put a strain on pension admin departments and systems. There is not a lot of tangible evidence that schemes will be ready in time, but eventually the simpler rules should help to improve administration standards.

1. If you have a skilled and experienced individual or group of individuals then generally administration can remain at a relatively high standard irrespective of the strength and effectiveness of the processes and technology supporting them.
   Where the skills and experience of the people are spread over a larger group then the importance of high levels of automation in processes and technology will become more critical. Poor administration can generally be traced back to the quality of the implementation process at outset; if corners were cut during implementation then it will have repercussions for the ongoing services.
2. There is no tangible reason why administration will be given a higher priority under the new pensions act although the way in which benefits are determined under the changed regime will mean communication (of new terms and requirements) will be a priority.
   Indirectly, it is possible that companies and trustees will use the pensions act to change the design of their arrangements and this may bring a fresh dynamic to the quality of administration services.
3. Technology can play a critical part in the improvement of administration services. As human beings we rarely exploit the full potential of the technology around us and yet it offers huge potential for increased (but sensible) levels of automation eliminating manual intervention which can be the point at which errors occur most frequently.
   The administration industry should spend more time investing in higher levels of automation – in calculations, processes, workflow which would improve speed, accuracy, consistency and overall efficiency.
4. Different suppliers (of systems and administration services) are in various states of readiness for A-day. Most suppliers will be ready for changes to underlying systems and processes to accommodate the core compliance changes. The two major unknowns revolve around the detail of the final regulations and the extent that companies and trustees will make late changes to scheme design ultimately affecting administration.
   If the regulations are published relatively late or companies disclose their required changes relatively late then for a period post A-day those delivering scheme administration may have to depend on (sub-optimal) manual intervention in the determination of benefits.

1. We often like to say poor data and very often that is true (and not entirely in the administrator’s hands) but it can be more than this. It is frequently a lack of resources– it can be amazingly difficult to convince the employer or trustee how complex pension administration can be. But as pensions managers, maybe we also need to take responsibility for sometimes not investing as much time and money in the people we employ as we are prepared to do in the IT systems.
2. The act itself contains little about administration and an opportunity was missed there. Administration should be an item on every trustee board agenda to give them the opportunity to raise and discuss issues, even if they don’t always feel the need to take the opportunity. Hopefully, the regulator’s trustee knowledge and understanding (TKU) requirements may stimulate trustees to consider their scheme’s administration a little more.
3. Proper use of a good IT system can bring benefits of consistency and speed, perhaps even more important for defined contribution (DC) than defined benefit (DB) administration. It can also improve accuracy by using straight-through processing and avoiding the hand-offs and repeat input that otherwise occurs. Technology can be expensive as systems often come with functionality you may not need. Administrators should use systems that meet real, identifiable needs. For example, web technology may be essential for a scheme with well paid staff with high speed internet access, but for others, it may not add much at quite a high cost.
4. Temporarily it will have an adverse impact. Most administrators won’t have an A-day compliant system until close to A-day and so benefit estimates, for example, beyond A-day will be problematic. Defining the necessary changes will also be time-consuming. But when it’s finished it will hopefully provide a pensions environment which will be much easier for members to understand, which should in itself help us improve the standard of administration.

The historical reasons for a lack of progress in raising standards in pensions admin can be consigned to the dustbin of history. While there is still work to do, it appears to be all hands to the pump, says Pádraig Floyd

An administrator’s degree of automation and technical knowledge can affect how complex calculations are done and incur operational risk. Trustees must consider this when selecting their supplier, says Clive Witherington

With the SRI market in Europe worth about E93bn and with several recent events placing it firmly in the spotlight, SRI is definitely here to stay, says Ruth Emery

1. I am confident that the industry is geared up for an upsurge in the interest in Sipps. At the very least everyone seems to be talking a good game. There have been only a few noticeably poor Sipp providers historically and in the main the Sipp providers have tended to have better administration standards than the conventional providers. I would, however, want to know that the Sipp provider I choose today is going to be adequately resourced to deal with any increase in volume that comes about later on.
2. I see consolidation as one of the big growth areas. Many existing conventional pension plan holders have grown disillusioned by the past problems of these types of plans and are quite attracted to a plan where they can control the investments. With the development of asset class modeling tools and a much easier flow of information, clients find the Sipp proposition quite compelling. As one of my clients said just this week at a review meeting: “For the first time I now understand what is going on inside my pension fund.”
3. There is a possibility that they could replace personal pensions and stakeholder plans. Sipps need not be costly and they open up the whole investment world. That said I suspect there could still be room for feeder plans until the personal pension or stakeholder plan reaches an optimum size.
4. The biggest problem is that simplification, in particular the opening up of investment choice, creates a huge demand for information but for the vast majority of enquirers, residential property, works of art, fine wines and vintage cars will be inappropriate, unsuitable and simply not possible. I shouldn’t complain, after all the business we are in is that of selling advice on such matters.

1. I doubt it very much, of course there will be IFAs who are already in this market and are very proactive with regard to A-day, but a large percentage of IFAs will be oblivious to the opportunities available for their clients simply because they are not working in that market. The providers will see this as an opportunity to increase distribution of a simplistic version of Sipp at low cost to the mass market, but it will be little more than a personal pension with a large range of funds.
2. Definitely low cost for the reasons above, but I also think that group Sipps could become more widely used as the cost reduces. I suspect that property, commercial or residential will still only appeal to those with large funds due to cost and the need for diversification of assets.
3. I think the general public at large will fail to notice and only those lucky enough to be able to afford independent financial advice will be aware of their existence and apply the benefits to their personal financial planning. Mass-market Sipps will be low cost, very simple versions as described in above. The public are unlikely to be aware of the detail in pension simplification or what that means for them.
4. Our main concern with regard to simplification and Sipps when advising clients is the apparent lack of clarity in some areas of the legislation. The Inland Revenue is still unable to help in a number of areas because it has yet to figure out how some aspects may be applied in practice. This makes some of the opportunities difficult to maximise when advising clients as we are working with the unknown.

1. There has been much debate about the consequences of simplification but one suspects not a great deal of practical activity. Part of the reason for this is the lack of the detailed regulations, which are now expected in August or September. This is a very short timescale in which to do systems development, recruit staff and produce literature in time for A-day. The gearing-up will therefore have to happen very quickly and some organisations may struggle to cope with this.
2. We think that residential property will drive the market in the short term post A-day. Media attention has ensured a wide coverage of the possibilities and there seems to be a great deal of interest in the market from the enquiries we are getting. We do not expect it to have a great deal of impact on commercial property investment – indeed, this could be slightly negative given the more restricted borrowing parameters and the focus on residential property. Family Sipps will have to await the outcome of the Inland Revenue review on inheritance tax aspects. We think group Sipps will increase, particularly with the increased permitted contribution levels, possibly replacing the traditional executive pension plans.
3. Yes, the pensions market is moving towards the Sipp model and A-day will give it a significant boost. The Sipp market will change from being for older, high net worth individuals who have already built-up significant pension funds during their careers which they wish to transfer to a Sipp, to a younger market able to put in significant contributions to create a Sipp without the need for a pension transfer. In addition, people are more interested in undertaking their own investment strategy than has been previously the case and companies will have to compete for market share as new pension providers come into the market post A-day.
4. The two main problems are coping with the practical changes to administrative systems that will be required post A-day and the amount of work that will have to be done to change the current format. There is very little time left to do this and one suspects most pension providers are awaiting the more detailed regulations before undertaking systems work. In addition, if the newly permitted investments really take off, it could be quite a challenge to cope with these from an administrative viewpoint, both in the context of their complexity and the sheer volume they could generate.

1. Yes, I think that they are. As far as the IFAs are concerned, many have seen the advantages for larger funds being invested in Sipps already and have geared up for this. The main difference after A-day will be less restriction on investments – mainly property.
   Many providers are now strengthening their propositions by utilising inhouse administration systems rather than contracted-out administrations, thus reducing costs.
2. In the early stages it will be property and I see houses abroad being an early attraction. After 18 months or so, this will wane because of the problems that will arise with the need for income returns and the very high legal costs on the continent. Add to this the old problem of illiquidity of property and possible decreasing values. For instance, if you buy a house in Spain for £200,000, legal costs would be £20,000 and the house is still only worth £200,000. Clearly £20,000 has to be made up by house price inflation or the Sipp has a large deficit.
3. I am sure they will but they are growing now. The rate of growth will only increase because of the wider investment possibilities.
4. Oh yes, there will be problems – investment freedoms can also lead to investment madness. I cannot favour residential property (other than buy-to-let) as being sensible because of the need for income from the property. The new rules will make it difficult for the purchase of commercial property. At present Sipps have unlimited borrowing towards a purchase, after A-day borrowing can only be up to a maximum of 50% of the fund value. This will restrict many would-be purchasers.

When Sipps were first introduced in 1989, there seemed little room for them in the pensions market. However, events since then have seen Sipps become a major force to reckon with, says David Baker

The new rules were designed to protect the consumer from costly, poor-value financial advice and to simplify the world of financial products, but some are saying that the new regime could backfire and actually turn consumers away from good advice. Peter Quinton reports

It is vital for pension schemes and their investment managers to work with service providers, as the asset servicing industry can provide significant support to schemes in light of the most recent developments, says Jemma Broadgate

Angela Huss tells Sipp and SSAS holders considering investment in commercial property to be aware of the high cost of being held responsible for the clean-up of environmentally contaminated land

Jenny Rosser, former managing director of the British Airways pension schemes, is the latest addition to the expanding Bestrustees team.

Punter Southall & Co has appointed Suzi Lowther to the new role of head of flexible benefits.

Intelligent Pensions, a Glasgow-based company specialising in complex pension matters for corporate and individual clients, has promoted David Trenner and Helen Docherty to associate director level.

Gartmore has strengthened its European senior management team by promoting Jeff Meyer to chief executive officer and elevating Les Aitkenhead to the position of chief operating officer.

Lane Clark & Peacock has appointed Paul Black as a partner within its investment team. Black joins from Buck Consultants where he was manager of the investment consulting business.

Space, according to Captain James Tiberius Kirk, is the final

1. Web security is one of the main factors limiting the adoption of technology and e-commerce. The very topic is too complex for most people to understand, encompassing as it does, computer system security, network security, authentication services, message validation, personal privacy issues, and cryptography. Yet the consequence is easily understood – damage to reputation and credibility that could take years to replace, plus the cost of physically repairing the damage caused by unauthorised access. Another big issue is that of legacy systems that simply do not cut the mustard.
2. Surely the most important use of technology is the ability of clients to obtain their information quickly and accurately in a plain English fashion.
   This would allow them to understand the consequences of their pensions plan both in the present and also the future. To allow them to update their requirements as they change with an immediate impact on the validity of the plan for their changed circumstances. Effectively a simple form of portfolio modelling.
3. Providers producing annual statements that show that everything is rosy one year, yet by the next the situation is desperate, does not give pensions clients any confidence that their future is in safe hands. Or that if they contributed more it would make any difference.
   If they had a choice, I believe that many pensions clients would prefer to put their faith in the government to provide a liveable pension and would contribute to a government scheme. This rather cynical view of providers could be managed by providers offering their clients clear information regarding present and future values, the effect of contribution and annuity rates and an overall assessment of plan risk.
4. The next big advance will be straight through processing and tracking, confidence in providers is not great, Equitable Life being a case in point. Aviary is making a huge investment to allow providers to manage their legacy data and leverage new technology to be able to display transparency of operation and processing.
   This will provide clear audit and accountability that can then be shown to the customers of these products. Then the advances in technology that will allow clients to access their information will have value because the processes backing this information can be understood and clearly demonstrated.
   For example why should a client not be able to compare a switch transaction price against all other transactions on the same day or any other day?

1. Prudential is one of the main participants in the Adviser E-Enquiry research project, a detailed piece of work with over 400 advisers which specifically looks at the barriers to take-up by advisers. This research has found that the main factor limiting adoption is significant variation in the quality of online services available for use.
   This is particularly the case with the larger, directly regulated firms, who in particular demand quality services which are user-friendly, fast and reliable.
   This is also true for small network and national advisers, but in addition these advisers are more likely to require financial incentives and/or training assistance to help them use services more effectively.
2. The simple answer to this is that technology use is essential by providers and advisers alike in order to make the overall process as efficient as possible, and to make sure that the advice continues to be accessible to all within the pricing of pension products. This is true for both the initial sale and for subsequent servicing, and to make it as easy as possible to use then it is important that the technology solution covers the full set of processes.
3. Particularly as A-day and pensions simplification approach, pension providers will use the web to make it increasingly easy for customers to find the information they need about pension planning and saving for retirement. This education process will be via employer intranet sites as well as via the provider websites, and has a huge role to play in improving the image of pensions and in helping people to save for their retirement.
4. We can expect to see huge progress in the area of employee benefit solutions available. For example, our new Pru@Work offering will provide a core, flexible and voluntary benefits package to employers enabling them to select a range of products from a number of providers. We see the development of this type of solution (including education, financial planning tools and worksite marketing communications) as a crucial support to overall pension planning and provision of financial awareness information, as well as to the government’s Informed Choice agenda.

1. Uncertainty provides a limiting factor. When the technology is available to use, the market adopts it. Availability however is subject to certainty in the market. Let’s take the case of the residential property market for A-day. Most of the market is agreed that residential property is an eye-catching asset class for investors to consider strongly. Uncertainty on the scale of adoption of this asset class coupled with uncertainty and concern on the impact on administration and compliance will create a limiting factor in the adoption of technology.
2. Technology is used to administer and deliver efficiencies and greater services levels to both the industry and the consumer. There are some key areas that need greatest attention. For instance, technology that provides value to the customer, such as valuations and interactivity. Ultimately customers are king. Furthermore, integration with information and service providers is important. Without efficient back office external capabilities, the industry does not have the capability to be efficient and as a result will not be able to scale and service its customers.
3. In one word, engagement. The banks have made amazing steps over the past seven years or so to engage their customers with technology. Most internet savvy people nowadays bank online in some form or other. This engagement through technology has delivered not only efficiencies for the banks, but has helped to foster brand loyalty, and develop and improve their image.
   Likewise, the pensions market needs to engage their customers with technology, so that value can be provided. The ability to get up-to-date valuations, to better manage contributions, to have a choice of investments and to understand those choices are key.
4. A dilemma that the market faces is in the delivery of high levels of service to a market that is scaling quickly. As flexible pension products such as Sipps become increasingly more popular, the levels of complexity in administering, in essence bespoke arrangements, increases. These products, if anything, will require greater service in the future, with more asset classes to choose from and greater flexibility in taking benefits. I believe the next big technology advance will be in communications between the industry and the consumer. We will see changes in uses of technology that enable the market to scale while still offering high or higher levels of service. We are already seeing the media industry change with increased participation and communication through blogging, for instance.
   I suspect we will see more of these types of technologies incorporating personal portal interfaces becoming much more common.

1. The rate of adoption in recent years has been good, but could be better. There are still a plethora of packages, solutions and platforms in the marketplace which can be confusing for advisers looking to select the right package.
   The group pensions market is probably ahead of the curve in terms of embracing technology, but we are starting to see real innovation on a number of fronts – notably around asset allocation tools. As these innovations bed in, the market will begin to really unlock the benefits of technology.
2. In the group market, technology has been the catalyst in unlocking major improvements in efficiency, accuracy and timeliness – which have in turn done much to improve service to schemes and their members. Technology has also helped ease pressure on margins, driving significant efficiencies for everyone concerned in the running of group schemes.
   Technology has also reached scheme members with tools such as investment planners, what if calculators and online switching doing much to put scheme members in the driving seat with their pension arrangements.
3. Technology can and should allow consumers to access their pension information in a quick and simple manner. Many people will have more than one pension arrangement (in addition to their state pension provision) and a one- stop aggregation service that allows them to see the full picture and explore how this compares to their plans in retirement would be a key part of the education process around the savings gap.
4. In the adviser market, there are still huge gains to be made in the automation of commission reconciliation. There also needs to be further standardisation around provider approach.
   In the consumer market, I expect the governments efforts around informed choice to result in significant developments in the sharing and communicating of pension information – this will be a big step forward for the industry in delivering concise, timely information to help consumers take control of their pension provision.

Paul Pettitt explains the importance of establishing uniform e-commerce standards across the life and pensions industry

Pension scheme members will soon be able to switch their retirement savings into personalised portfolios without the help of an adviser. Will Hadfield discovers that providers are preparing to offer asset allocation tools to anyone who wants them

The potential for efficiency gains offered by technology in the group pensions market is huge, but only if the employer takes time to explore in detail the technology providers are offering, says Ross Easton

After a century and a half as a life office Prudential is still at the cutting edge of technology – a statement that was backed up by three awards at the recent PM Technology Awards, says Jon Cross

Perspective, the information resource from Pendragon, received two PM Technology Awards for the second year running. Simon Freeman reflects on its achievements and what still needs to be accomplished

Technology has been a buzzword for some years now within financial services. Of course, rather than be used as a sword of truth, making transactions easier, it has often been to obscure the continual problems surrounding life office administration.

The PM Technology Awards 2005 invited entries from providers in the life and pensions industry.

The judges (see biogs below) were each given a number of categories for initial judging.

They judged entry and then presented their findings to the panel at a special session on Tuesday 31 May. The session was chaired by Pádraig Floyd, PM’s executive editor.

Each judge summarised the entries in their category and gave their opinions on who might be nominated for the awards.

These nominations were debated by the panel until agreement was reached about the winner and runner-up in each category.

Pendragon is a specialist information company, dedicated to providing information to the UK pensions industry. It is committed to delivering information solutions: electronic, printed, spoken or audio-visual, whichever is best for a particular purpose. The objective is always to provide the most useful and useable information available to the market.

With Perspective, Pendragon offers the definitive and most cost-effective information service available to the UK pensions industry.

Today, Perspective is to be found at more than 150 organisations across all sectors of the industry, many on a multi-site basis. The number of documents on the service now approaches 9,000.

Prudential UK has extended its product range in 2004 to include PruFund, a transparent smoothed investment product, and PruHealth, an innovative health insurance product linking health and fitness to the cost of premiums. It has won places on many of the new multi-tie panels, including Sesame, Millfield, Tenet, Burns-Anderson, and THINC Destini. It has signed a five-year partnership agreement with St James’ Place Capital to sell annuities and has been nominated by Barclays as one of its multi-tie product providers.

www.pruadviser.co.uk is continually being updated and enhanced to offer a full suite of on-line transactions and information on the complete Prudential product range. Services include

• literature
• illustrations
• on-line submission
• valuations
• new business pipeline tracking
• portfolio planner

Scottish Widows is one of the oldest and most widely recognised assurance companies in the UK. (Source: Market Minder, November 2004.) We have an excellent financial rating both as a stand-alone operation and as an integral part of the wider Lloyds TSB Group, in which we have a major strategic role.

When introducing a new scheme to the workplace most employees will be more comfortable with a name they already know and trust. The confidence and empathy created by our brand is clearly reflected in the buying choices made by consumers. For the last eight years we have consistently held one of the top three positions for ‘willingness to deal’ in our main markets of life, pensions and investments. (Source: Young & Rubicam BAV December 2003.)