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    Pension Scheme Process Automation and the Art of Efficiency

    By Tom Nimmo on Monday, August 22, 2016

    Going through the process of reviewing functional system requirements for pension scheme administration software can be a bewildering experience. So often I am confronted by a functional requirement that makes me ask “why is that even in there”. Frequently, the answer lies in the fact that the end user has requested for a workaround to be automated. If functional requirements of this nature were to be implemented without challenge, there is a danger that over time pension scheme administration systems would come to resemble the software equivalent of the convoluted contraptions of Rube Goldberg or Heath Robinson (see picture below).


    (Self-Operating Napkin, Rube Goldberg, 1931)


    If there is a science to writing good functional specifications for pension scheme administration software, then there is an art to realising those requirements in the form of efficient, user-friendly, and reliable systems. Part of the approach involves understanding the root cause or underlying driving force behind a functional requirement’s inclusion in the specification and then to identify whether the need for that functional requirement could be eliminated by the development of another automated process. Doing so can require a creative interpretation of the functional requirements in order to imagine what has motivated their inclusion in the specification.


    I recently encountered an example of ‘complicating functional requirements’ in a draft specification for a pension scheme administration and pensions payroll system. One of the functional requirements was that pension scheme members’ records must remain read-only during payroll processing cycles. With payroll cycles taking a considerable amount of time to process and reconcile, it seemed slightly impractical to insist that pension scheme administrators should be prevented from updating system records for prolonged periods. However, after discussions with the various users involved, it became clear that this enforced lockdown was purely to avoid reconciliation errors creeping into the pensions payroll processing results, and it wouldn’t be an issue if payroll data was processed slightly differently. The result was that by taking a rational and holistic view of the specification, a solution was achievable that met the requirements of all users, whilst improving overall efficiency of the system.


    The holistic view of a functional specification is incredibly important as it can help to capture the emergent properties of a system - factors or outcomes that cannot be identified by looking at the individual components of the system in isolation, but only by examining the interactions between groups of components. From experience, managing these interactions and improving interrelated processes can be achieved through closer integration of functionality within pensions software solutions. For example, by fully integrating pension scheme administration functionality with actuarial valuation functionality our own pensions software solution, Mantle removes many of the workarounds that occur in the course of data migration and validation exercises, allowing many key processes to be streamlined and automated. In effect, it is the pensions software equivalent of connecting Rube Goldberg’s spoon directly to his napkin!

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