The retirement plan industry, like many in the traditional financial sector, adopted technologies that have served them well in the past. However, with new age technologies changing the way businesses operate, legacy systems are proving to be a bottleneck in scaling up, driving innovation and delivering better customer service. A leading, 100-year-old, Fortune 500 insurance giant with a large Retirement Division in the United States was faced with this exact challenge. The company with an AUM (in its retirement business) of over USD 2 billion faced with three critical hurdles to growth.
- Their system needed manual intervention at multiple points and did not render itself to offering a self-service solution for end-users
- They were unable to scale up significantly as their agents were tied up servicing existing clients with a lot of transactional issues that was generated by their older system
- They were unable to offer custom or complex plan documents to their client because of their inability to process those plans
Problem AreasThe retirement plans were maintained on three different recordkeeping systems that was proving to be expensive. To achieve economies of scale, the client tried to unify the plans into a single recordkeeping system but couldn’t do that due to incompatibility and the prohibitive cost. Due to this, a large number of their small-to-medium accounts were managed on a homegrown system since it was best suited for the purpose. The medium-to-large plans were maintained in an external record keeping system. It did not make economic sense to move the small and medium plans to this system. Further, this system could not support some of the standard provisions offered in the industry. The provisions the systems was unable to support were: Eligibility – The company was dealing with multiple eligibility provisions within a plan, for different groups of employees and breaks in service Payroll processing – The systems were unable to compute or validate complex match formulae such as a tiered provision or different match percentages by employee classifications. The entire payroll echo system was archaic, where the self-service component was missing, forcing agents to intervene on behalf of customers rather than spend their time better by focusing on sales and growth
Proposed SolutionThe company needed a cloud-based payroll frontend for all of its systems, which could talk to the different record keeping systems in the back end. It also required census and eligibility management systems that can be managed by the sponsors directly via self-service. This simple technology-based solution could unclog the bottleneck.
Congruent’s ApproachCongruent Solutions, a leading technology solutions provider for the retirement industry, successfully completed a proof of concept where it replicated simple, medium and complex plans on its CORE Payroll system in just two weeks. In addition, CORE platform is modular and configurable, giving the customer the flexibility to prioritize and choose specific features first, and adding others later based on need. The solution runs hundreds of rules and validations to ensure data sanctity and provide a web front end for the plan sponsor to manage its users. MS Azure cloud deployment increased the cost effectiveness of the solution by reducing the mainframe usage and had also enabled quick scaling up for the client. All of Congruent’s employees are trained and certified in the domain. We understand the nuances of Retirement Plan Administration and speak the same language as our clients in the industry. The team worked closely with the client to understand specific needs (and wants), the existing architecture, systems and requirements in every step of the way. As a result, the client chose Congruent’s CORE platform for the CEEP modules (Census Eligibility Enrolment Payroll) and integrated the solution with multiple record keeping systems at the back end. The implementation began in June 2018 and the system has been in production since January 2019. Since then, there have been 3 more releases.
- Although the client had three record keeping systems, they had built surround systems to overcome some of the gaps in their current system. These will be retired and the process simplified.
- In terms of capabilities, there were several things that were done manually or done using additional systems that were developed just to fulfill the deficiencies. Off the bat, we were able to offer more functionality and retire two of the existing surround systems.
- Thanks to the self-serve capability introduced in the system, agents were able to focus on client engagement in meaningful ways rather than doing mundane work, resulting in greater stickiness.
- New functionalities added on top of the client system enhanced the ability of the client’s sales team to sell more custom plans rather than just pre-approved plans.
- Due to the inherent architecture design of the CORE platform, plan provisions need not be maintained in multiple places avoiding replications that are often common to such integrations.