Customer Service Success in Pension Risk Transfer

 

With Londone Moulds, VP Head of Client Service and Operations at Legal & General Retirement America

In the ever-evolving landscape of pension management, Pension Risk Transfer (PRT) transactions have emerged as a pivotal strategy for companies looking to de-risk their pension liabilities. The US PRT market has seen significant growth, and as PRT transactions become more prevalent, the importance of exceptional customer service cannot be overstated.

Customer Service Excellence

Superior customer service is crucial for both the plan sponsor and plan participants. An insurer should guide the plan sponsor on best practices for communication and ensure that participants have a seamless experience during the onboarding transition. Effective customer service not only ensures a smooth transition but also builds trust and confidence among all stakeholders involved.

Understanding Pension Risk Transfer Transactions

PRT transactions involve transferring pension liabilities from a corporate sponsor to an insurance company. This process can be complex, involving meticulous data preparation, legal agreements, and seamless communication between the plan sponsor, insurer, and annuitants. The goal is to ensure that pensioners continue to receive their benefits without disruption while the sponsor mitigates financial risks.

Executing a Successful PRT transaction

Executing a successful PRT transaction involves 3 key components: preparation, quotation, and implementation. Working with a consultant to carefully plan and prepare data is essential as up-to-date participant data allows insurers to reduce risk charges and price more competitively. The plan sponsor should also conduct a thorough financial review of their pension plan to determine whether a full or partial buy-out is feasible and work with an annuity placement provider to manage the quotation process. When the quotation process is complete and an insurer is selected, a clearly defined implementation process is put into action with effective communication to make sure participants experience a smooth transition to the insurer. More details can be found in our Quick Guide to PRT.

Key factors that plan sponsors should also assess when selecting an insurer includes proper due diligence on all relevant laws and regulations that govern PRT transactions, an insurer’s financial stability, and its ability to meet annuitant administrative requirements. This assures that the transaction is legally sound and that the interests of both the plan sponsor and the pension participants are protected. The Department of Labor’s Interpretive Bulletin 95-1 provides guidelines to ensure that plan sponsors select the safest available annuity provider.

Providing Accurate Data and Clear Communication

Two of the most critical aspects of a successful PRT transaction are having accurate participant data and effective communication. Membership data like member employment/plan status, marital status, date-of-birth, and geographical zip codes directly impacts insurer pricing and the efficiency of a transaction. Inconsistent data can lead to delays and complications, making it essential for plan sponsors to work closely with vendors to create a realistic snapshot of accurate data.

Moreover, communication is key not only between the plan sponsor and the insurer, but also with the participants. Clear and proactive communication ensures that participants are well-informed about the transition process. Participant communication should start with an introductory transition letter from the plan sponsor followed by a welcome communication from the selected insurer that answers frequently asked questions and outlines the next steps.

Effective customer service and communication during PRT transactions help build trust and confidence among all stakeholders. For plan sponsors, knowing that their participants are in good hands with the insurer provides peace of mind. For participants, clear communication and responsive customer service ensures that they feel valued and supported throughout the transition.

Working with Legal & General Retirement America (LGRA)

LGRA was founded in 2015, but our processes have been built and refined from 35+ years of PRT experience globally. We take pride in providing exceptional customer service to meet the needs of our 200,000+ annuitants as we secure their financial futures. Through our commitment to offering dedicated assistance, we aim to support our plan sponsors and provide long-term value for our stakeholders. 

We provide thorough, deal-specific training to all associates involved in a new PRT deal. This training ensures that each annuitant receives a personalized experience tailored to their specific needs. LGRA also tracks key performance metrics such as average speed to answer, call abandonment rate, and first call resolution, which are consistently measured to maintain our high standards of customer service. It’s necessary that each Retirement Services Associate takes the time they need to answer questions or resolve an annuitant’s inquiry, which is why we don’t measure the average length of calls.

Our commitment to continuous improvement is another vital aspect of customer service in PRT transactions. Our dedication to operational efficiency and continuously evaluating our processes to find ways to streamline and enhance customer service is what sets us apart. As technology evolves, the need for efficient and easy to use self-service options through online portals, while maintaining the availability of hands-on support for those who prefer it, continues to rise.

Conclusion

Exceptional customer service is the backbone of a successful PRT transaction. It ensures that data is accurate, communication is clear, and participants feel supported throughout the process. By prioritizing customer service, insurers can build trust and confidence, ultimately leading to smoother transitions and better outcomes for all parties involved. As the PRT market continues to grow, the emphasis on customer service will remain a critical factor in achieving success.