Administrating through a pandemic

BY JASSMYN GOH

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.

TThere is no doubt that one of the biggest McGrath said the biggest challenges had to introduce additional identification responses to the COVID-19 pandemic in were to do with processing, having to quickly requirements which led to some minor Australia was the Government’s early access address member questions, and trying to delays in issuing some payments. to superannuation scheme. fast-track claims within 24 hours for those “But it was a prudent change the ATO Once the scheme was announced to the people who were in dire circumstances. introduced in the third quarter. Generally, public, super funds had just weeks to come “One of the things that you don’t we were in good shape in being able to up with a process that expected the funds to necessarily design for – we had people that support that outcome.” release a maximum of $10,000 to any member suffering from financial hardship as a result through no fault of their own might have put a wrong digit in so we had incorrect bank Insourcing vs outsourcing admin from the virus’ impact for the first tranche. details. We were seeing rejections on a daily Given Aware Super, formerly First State Super, Despite worries about liquidity, Australian basis in the files being sent to the banks so both insources and outsources administration super funds were successful in collaborating we had to contact those people and get things chief operating officer, Jo Brennan, said the with their administrators and the Australian reprocessed and so it was a really large fund needed to process the early release

Taxation Office (ATO) to roll out the program. program of work,” McGrath said. claims under three different systems.

Link Group’s chief executive for retirement “There were people in some quite dire The super fund inherited the three different and super solutions, Dee McGrath, told Super circumstances so we were making sure we systems as a result of the mergers with

Review, that they had just 19 days to work were able to deliver. So far we’ve delivered StatePlus and VicSuper. with the ATO and the broader industry to around 97.5% of the claims in the five days While both StatePlus and VicSuper build, design, and implement the scheme. and also being able to make personal insourced all of their administration, First

“The industry did a really good job in contact with people where we needed to State Super used a hybrid system with some coming together in a collaborative way to clarify something.” services inhoused and some outsourced. implement a solution. Overall, there have Mercer commercial operations leader, “When it came to the early release scheme been 3.3 million claims across the industry Pacific, Chris Stevens, said Mercer had we needed to make changes and processes so far. We have processed over two million identified that it needed to work quickly with three times to each platform. This increased of those and about $17.5 billion to date. The its superannuation fund clients to ensure the cost and risk when making the changes industry has done a really good job, our everyone was on the same page. three times,” she said. clients have been incredibly proactive and “We had to set up project teams quickly, “We have the WA Super merger coming supportive through that period,” she said. to make sure the tech and the interface with up next month and we are fundamentally

Apart from building the system that the ATO was in place, and we could support simplifying our business and bringing all our would process the applications, McGrath the scale and volume of requests coming in. administration inhouse so that we have full said Link needed to think through the That was a really successful program that control and accountability for that service security and what the ATO were doing. The led to deferrals of some other activity but it delivery. It’s a really complex program of work administrator added features such as SMS was really critical and we prioritised that for and so we’ll do that progressively.” updates once it received a claim to validate members. By in large it was very successful Brennan noted that the fund looked to the member had requested the claim as a and while there is still some activity to early amalgamate the three systems within the next form of second line of defence. release, it certainly had its peak in April, July, 18 to 24 months.

As the Government stipulated that 95% of and August,” Stevens said. She said insourcing allowed her fund to claims needed to be paid within five business He noted that prior to the second have full accountability and control on the days, McGrath said Link needed to make sure tranche of the scheme, the ATO recognised member experience. The ability to streamline they could process those payments that were that security of member information and drive its strong digital first model would in the thousands of dollars. was critical which meant administrators allow the fund to have its hands on the levers

that would make the most difference for members, she said.

“By insourcing we can focus on the digital side allowing members to access us anytime and we’ll be able to drive a strong continuous improvement around that,” Brennan said.

“We’ll also be able to drive the member first culture focus across the entire team through one single model and view by having a single view of our members. By having one system we’ll have that control and accountability and it will create a cost efficiency by using our scale.”

However, McGrath said super funds were more likely to outsource rather than insource their administration.

With the Government and regulators putting focus on members’ best interest, McGrath said super funds were looking at what they could do themselves versus what an administration partner could provide for their fund.

“Going forward, less and less funds are going to look at the end-to-end themselves. I think they will look at having a large component of administration outsourced from a provider to provide scale and the continued investment into technology,” she said.

The insourcing and outsourcing topic, Stevens said, was something the wealth management industry was continually considering for their super administration whether it be part of their offering as a core part of their business or to looking to partner with an administrator.

When thinking about the investments Mercer had made into their administration business on an annual basis, Stevens said there were very few examples where he could see where funds could insource their administration as it was a significant investment commitment.

“Insourcing potentially adds risk to the business and funds need to be mindful of those things. By in large we still see the majority of our industry being administered by very large institutional providers,” he said.

What funds want from their administrator

Even prior to the pandemic compelling businesses to pivot towards digital offerings, super funds were already looking at administrators to help support their value proposition through digital and data services.

Stevens said more super funds were asking Mercer to provide broader access to member data to gain a better understanding of their membership to allow them to give better support.

Brennan said Aware was looking to drive a digital-first experience for members to allow requests to be processed quickly, and to provide a facility for members to track their requests – much like tracking parcel deliveries.

This would allow members to understand the timeline and where things were in the process, and empower members to have the most efficient and seamless service by being able to access their fund anywhere, anytime.

App support was another part of the digital first experience Brennan said was an important part of their administration.

“Members will be able to go to the app safely and securely and simply be able to access the information they need and complete the things they need to do online simply and consistently,” she said.

“If they need help and support we have a team that’s empowered to be able to help them with what they need quickly and as simply as possible. Super is complex and being agile makes it less complex.”

She noted that the early release scheme highlighted how important security was for members and that her administration team were conducting ongoing assessments and reviews of its security system and model.

McGrath agreed and said there was a big focus on digital transformation and that COVID-19 had fast tracked that focus. This included designing experiences that made it easy for members to engage with their fund whether it was through mobile apps, websites, click-to-chat functions, and phone services.

Personalisation and the ability to respond to member needs was another part of the digital transformation as Link was working on building tools and solutions to help people plan for retirement.

She said super members needed to have the tools to provide them with a living salary in retirement.

“So, we’ve got some digital capabilities we will be launching in 2021 that helps them to be able to put certain funds into a pot that gives them an income. They might want to put some in a rainy day, or into a holiday fund, or whatever they choose to which allows them to manage their funds in retirement more effectively,” she said.

“The other thing is administration is very much enabled by technology so I think funds are thinking about how they look at their service strategy and us as an administrator the investments we continue to make.

“We made $250 million of investments in the last year and we continue to build on the capability that we have. It’s about taking the friction out of the experience and making sure it’s a good experience and providing the tech and tools to further clients and having that human element in our people that are servicing them every day.”

SUPER FUND SUPER FUND OF THE YEAR AWARDS 2020

In partnership with

AustralianSuper wins Super Fund of the Year 2020

BY JASSMYN GOH

AustralianSuper has been named Super Fund of the Year 2020 at Super Review's Super Fund of the Year Awards, with TThe coveted win was based on a holistic assessment of the finalists in each award category and AustralianSuper was deemed to be the most outstanding fund this year. plans to pass on benefits of scale to members. It was also praised for its ability to react and empathise with members in difficult times such as free death cover its research partner, The Heron Partnership. Heron’s chief executive, Chris Butler, said the fund had during COVID-19, its full offering from accumulation to strong and consistent long-term investment performance retirement phase, comprehensive member servicing, and with very competitive fees, and ongoing and evolving its experienced trustee board and executive team.

CATEGORY

Best Corporate Solution Product Best Industry Fund Best Public Sector Fund Best Pension Product Best Insurer Best MySuper Best Commercial Product – Personal Best Member Engagement Innovation Super Fund of the Year 2020

WINNER

Sunsuper for Life Corporate AustralianSuper Aware Super AustralianSuper Choice Income MetLife Unisuper BT Panorama Super Russell iQ Super AustralianSuper