ADMINISTRATION
Administrating through a pandemic BY JASSMYN GOH
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With just weeks given to superannuation funds to build processes for the early release of super scheme, much of their success in paying $34.8 billion to over four million applications has come from administration whether the function is insourced or outsourced.
There is no doubt that one of the biggest responses to the COVID-19 pandemic in Australia was the Government’s early access to superannuation scheme. Once the scheme was announced to the public, super funds had just weeks to come up with a process that expected the funds to release a maximum of $10,000 to any member suffering from financial hardship as a result from the virus’ impact for the first tranche. Despite worries about liquidity, Australian super funds were successful in collaborating with their administrators and the Australian Taxation Office (ATO) to roll out the program. Link Group’s chief executive for retirement and super solutions, Dee McGrath, told Super Review, that they had just 19 days to work with the ATO and the broader industry to build, design, and implement the scheme. “The industry did a really good job in coming together in a collaborative way to implement a solution. Overall, there have been 3.3 million claims across the industry so far. We have processed over two million of those and about $17.5 billion to date. The industry has done a really good job, our clients have been incredibly proactive and supportive through that period,” she said. Apart from building the system that would process the applications, McGrath said Link needed to think through the security and what the ATO were doing. The administrator added features such as SMS updates once it received a claim to validate the member had requested the claim as a form of second line of defence. As the Government stipulated that 95% of claims needed to be paid within five business days, McGrath said Link needed to make sure they could process those payments that were in the thousands of dollars.
McGrath said the biggest challenges were to do with processing, having to quickly address member questions, and trying to fast-track claims within 24 hours for those people who were in dire circumstances. “One of the things that you don’t necessarily design for – we had people that through no fault of their own might have put a wrong digit in so we had incorrect bank details. We were seeing rejections on a daily basis in the files being sent to the banks so we had to contact those people and get things reprocessed and so it was a really large program of work,” McGrath said. “There were people in some quite dire circumstances so we were making sure we were able to deliver. So far we’ve delivered around 97.5% of the claims in the five days and also being able to make personal contact with people where we needed to clarify something.” Mercer commercial operations leader, Pacific, Chris Stevens, said Mercer had identified that it needed to work quickly with its superannuation fund clients to ensure everyone was on the same page. “We had to set up project teams quickly, to make sure the tech and the interface with the ATO was in place, and we could support the scale and volume of requests coming in. That was a really successful program that led to deferrals of some other activity but it was really critical and we prioritised that for members. By in large it was very successful and while there is still some activity to early release, it certainly had its peak in April, July, and August,” Stevens said. He noted that prior to the second tranche of the scheme, the ATO recognised that security of member information was critical which meant administrators
had to introduce additional identification requirements which led to some minor delays in issuing some payments. “But it was a prudent change the ATO introduced in the third quarter. Generally, we were in good shape in being able to support that outcome.”
Insourcing vs outsourcing admin Given Aware Super, formerly First State Super, both insources and outsources administration chief operating officer, Jo Brennan, said the fund needed to process the early release claims under three different systems. The super fund inherited the three different systems as a result of the mergers with StatePlus and VicSuper. While both StatePlus and VicSuper insourced all of their administration, First State Super used a hybrid system with some services inhoused and some outsourced. “When it came to the early release scheme we needed to make changes and processes three times to each platform. This increased the cost and risk when making the changes three times,” she said. “We have the WA Super merger coming up next month and we are fundamentally simplifying our business and bringing all our administration inhouse so that we have full control and accountability for that service delivery. It’s a really complex program of work and so we’ll do that progressively.” Brennan noted that the fund looked to amalgamate the three systems within the next 18 to 24 months. She said insourcing allowed her fund to have full accountability and control on the member experience. The ability to streamline and drive its strong digital first model would allow the fund to have its hands on the levers
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12/11/2020 12:41:08 PM
