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Don’t you forget about me(mber experience)

Pensions & benefits

You’re a DB pension trustee. You’re feeling fantastic. You’ve reached the almost unimaginable feat of a fully funded pension scheme. Next stage: buy-in!

Which insurer will you choose? There’s lots to think about – price (obviously!), financial strength, ESG investments, maybe brand recognition. But don’t forget to think about administration. In particular, the quality of the admin once you move from buy-in to buy-out.

Whilst security of benefits will be your top consideration, remember that the member experience is important. How long will it take for members to receive a response to a request? Is the web functionality any good? How clear are the communications?

Your decision to move to buy-in will – in part – be judged on the quality of the administration service members receive in future. So, it’s really important to consider this alongside those financial factors, and make sure you do what you can to get it right.

Push the button

Think about member web functionality. What does your own administrator currently offer to your members? Can members get quotes online? How does that differ from what an insurer might offer?

If your current offering is better than an insurer’s, it may be seen as a backwards step. So make sure your shortlisted insurers can offer a similar (or better) level of web functionality. If you are happy to accept lesser web functionality in return for benefit security etc, be sure to explain this when telling members the news about the buy-in. It’s worth considering how many of your members currently use your web offering; if your membership is very engaged then a lesser web functionality may not be well received. If your membership prefers to be assisted over the phone, the size of the administrator’s support team becomes more important.

Your place or mine?

Some Bulk Purchase Annuity (‘BPA’) insurers administer their buy-out policies in-house, whereas others outsource it to a third-party administrator (TPA). But which approach is better? Neither approach; there are pros and cons of each:



  • Keeping the admin in-house gives the insurer more direct control over the admin
  • Outsourcing also provides flexibility as if the outsourced administrator is underperforming, the insurer could choose to move the administration elsewhere
  • An in-house approach could be more flexible, as there wouldn’t be a reliance on working to an administration contract
  • Outsourcing allows the insurer to choose a professional administrator with a strong investment in technology which often results in well-developed specialist administration systems
  • Professional third-party administrators may be better able to react to industry changes and the associated administration impact (e.g. different GMP equalisation methods)

What’s in a name?

Where BPA insurers choose to outsource their admin, most will use a third party with a strong track record of providing pensions administration services.

This can be a double-edged sword: many who work in the pensions industry – including pension trustees – will have (sometimes quite strong!) preconceptions of the main third-party administration firms based on previous dealings with them. But it’s not as simple as that...

The administration service provided by third-party administrators to BPA insurers is often better than the service provided by the same firms to individual schemes. Why? In the long-term, the number of insurer policyholders will be far higher than the pension scheme membership of an individual scheme – in other words, the insurer is a “big client” and gets “big client” service.


  • Don’t forget the importance of thinking about administration when selecting a BPA insurer.
  • Some insurers do admin in-house, some outsource. Neither approach is necessarily better than the other.
  • Don’t let your existing preconceptions of the big administrators sway your decision!

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