Controlling costs while improving member experience

When two pension schemes set out to align their operations, their trustee boards had clear priorities around efficiencies and cost control. By partnering with Barnett Waddingham (BW), they not only achieved cost certainty but also enhanced their members' digital experience — leading to measurable savings and simplified administration.

Aligning schemes to deliver efficiency and cost control

The trustees of two schemes — each belonging to the same corporate group — were looking to improve the efficiency of their operations by aligning advisers and harmonising governance. One of their top priorities was to gain more control over professional fees, ensuring they had cost certainty and transparency over time.

Having built a trusted relationship through our actuarial and administration services for one of the schemes, BW was appointed in 2021 to extend these services to the second scheme, valued at £200 million. The trustees' key objectives were:

• Greater predictability and transparency over costs.
• Streamlined administration with consistent service standards.
• Improved member experience through enhanced digital capabilities.

Implementing a transparent fee structure and digital solutions

We worked closely with the trustees to implement a bespoke fixed fee structure that gave them confidence in their budgeting, while also modernising member communications and processes. Our approach included:

• Conducting a detailed assessment of membership activity to incorporate as much work as possible within a fixed fee agreement.
• Rectifying data gaps and introducing our Pension self-service online portal, allowing all members to access benefit illustrations and manage their pensions digitally for the first time.
• Rolling out communications and reminder campaigns to encourage portal registrations and member engagement.
• Providing regular reports on member interactions with our administration team to ensure complete transparency and avoid unexpected activity charges.
• Committing to an annual review of the fixed fee agreement, adjusting assumptions based on actual member activity.

In parallel, we delivered GMP equalisation for both schemes. For one scheme, this involved GMP conversion, simplifying complex benefit structures and reducing the need for individual actuarial calculations.

Reducing fees and simplifying administration over time

Three years into the appointment, the results speak for themselves:

• At the first anniversary, 40% of members had activated their Pension self-service accounts, resulting in lower manual administration. We reduced the assumed activity level from 20% to 15%, which decreased the administration fixed fee.
• By year two, continued growth in online engagement allowed us to reduce the assumed activity level further to 12.5%, delivering additional savings.
• At the third anniversary, online registrations rose further and the workload on our administration team reduced again, enabling us to lower the assumed activity level to 10%.

The simplification achieved through GMP equalisation and conversion also reduced the need for actuarial involvement in member calculations, resulting in a lower actuarial fixed fee.

"Barnett Waddingham have delivered on their promise. We consolidated advisers across two schemes to increase efficiency. Through engaging with the membership and getting them online, Barnett Waddingham have been able to reduce activity costs and given us the cost certainty we wanted."

A sustainable approach to cost control and member experience

By aligning services across both schemes and leveraging digital tools, the trustees have achieved:

• Greater control and certainty over professional fees.
• Year-on-year reductions in administration and actuarial costs.
• A more streamlined and engaging member experience.

This collaborative approach has delivered sustainable efficiencies and cost savings — demonstrating how thoughtful alignment and transparency can benefit both trustees and scheme members.

• Actuarial Consultant Sarah Berry contributed to this case study.