Andrew Phillips
As the world rapidly evolves with advancing technologies, many sectors are facing increasing pressure to modernize legacy systems. The pension industry, in particular, stands at a critical crossroads, as organizations across the United States look to upgrade their pension administration systems. This modernization effort isn’t just about adopting new technology. It’s about delivering more efficient, transparent, and user-friendly systems for both pension providers and the members they serve.
However, in the U.S., the scale and complexity of these systems can make change feel overwhelming. Many current suppliers in the pension administration software (PAS) market are known for delivering modernization projects that take up to seven years. This lengthy timeline discourages action, making it tempting for organizations to continue maintaining outdated systems instead. But the cost of waiting is high; growing inefficiencies, cybersecurity risks, rising maintenance costs, and unmet member expectations.
Some new entrants to the U.S. market are now delivering modern systems in over half that time, helping pension schemes avoid long, drawn-out transitions while still achieving meaningful transformation.
The importance of modernizing pension administration systems
Legacy systems are often fragmented, inefficient, and difficult to adapt. Many rely heavily on manual processes, struggle to support new regulatory requirements, and fall short of providing a positive digital experience for members. They also create a significant maintenance burden, which can hold organizations back from focusing on strategic improvements.
Modern platforms offer a very different approach. Built with agility, automation, and security in mind, they allow pension providers to streamline workflows, enhance data accuracy, and reduce administrative overhead. Real-time reporting and automated calculations help ensure benefits are processed with greater speed and accuracy, while cloud-based infrastructure supports faster updates and easier integration with other systems.
Workflow management is a key feature of modern platforms, enabling teams to track progress, automate approvals, and reduce bottlenecks. Meanwhile, powerful analytics, often built on tools like Tableau, provide automated and bespoke reporting for employers and members, helping all stakeholders better understand performance and trends.
Member engagement: a key component of modernization
While much of the focus in modernization is on infrastructure and administration, the member experience remains a critical driver of value. Historically, pension systems have struggled to deliver meaningful interaction with members. Confusing interfaces, outdated communication methods, and limited self-service tools have left many members disengaged or uncertain about their retirement plans.
Modern systems are designed to change that. With intuitive dashboards, real-time updates, and interactive tools such as retirement calculators, members can get a clearer picture of their pension status and projected outcomes. This clarity is crucial, especially as members are expected to take more responsibility for their retirement planning.
Education also plays a key role. Simplified resources, on-demand content, and personalized guidance help demystify pension benefits and promote financial literacy. Ultimately, engaged members make more informed decisions and are more likely to value and trust their pension provider.
What makes a successful modernization
Successful modernization is about more than just new technology. It requires a thoughtful approach that balances technical capability with usability and long-term adaptability. Key elements of effective modernization include:
- Clear, accurate calculations that improve trust in the system
- Integrated workflow management to reduce manual tasks and errors
- Mobile-responsive platforms that ensure access from any device
- Real-time communication that keeps members up to date
- Tailored analytics that support both strategic and day-to-day decisions
Modern systems should also be flexible enough to evolve, supporting regulatory changes, future enhancements, and the shifting expectations of members and employers alike.
Looking Ahead
The path to modernization doesn’t have to be disruptive or drawn out. With the right strategy and a clear focus on both operational efficiency and member outcomes, pension providers can move away from legacy limitations and toward more agile, responsive systems.
While some vendors still operate on long timelines, others are proving that transformation can be delivered in significantly less time - making modernization a far more achievable goal than it once seemed.
One such provider is Heywood, which offers a full suite of pension administration capabilities, including workflow automation, mobile accessibility, real-time reporting, improved benefit calculations, and Tableau-based analytics, in over half the time typically associated with U.S. modernization projects.
As pressures mount, from aging systems to rising member expectations, pension providers have a clear opportunity to invest in future-ready platforms that improve performance, reduce risk, and better serve the people who rely on them.
