Redundancies at British Airways coupled with members’ concerns about the security of their pensions have significantly increased the workload of its administration team, which has prompted the schemes to set up a communication plan to deal with the issue.
The airline schemes have been deluged with an increase in information requests at a huge time of transition for BA due to Covid-19, as the airline plans to cut around 12,000 positions.
Mark Smith, head of communications at BA Pensions, says: “Because our members work for an airline that is suffering significantly from the effects of the lockdown and the prolonged significant return to air travel, many thousands of members are looking at potential redundancy or life away from BA.
“Not only do we have direct information requests for pension quotations for members drawing their pensions and retiring, but lots of people are concerned about funding levels.”
We knew our members really needed us at that particular point because they were making decisions about their future
Fraser Smart, BA Pensions
BA Pensions runs services for more than 100,000 members across the airline’s two defined benefit pension schemes.
At times of economic stress, people inevitably want to have more information to hand to give them a sense of security, notes BA Pensions chief executive Fraser Smart.
He adds: “We've had a massive increase in the amount of information to be provided at a really difficult time when staff have been working from home.
“Our service turnaround times have been nothing like the ones that we deliver normally, but we've been trying to prioritise members’ needs.”
The member services team’s workload started building up in March, creating a large backlog of enquiries and caseworks.
It is currently experiencing a threefold increase in pension information queries, with an average 35-40 per cent rise in enquiries a week. The team usually deals with around 1,000 information requests at any given time whereas now it is handling more than 4,000, Mr Smith says.
Working remotely made it more difficult to see which colleagues were available to help with complex member enquiries. But around 75 per cent of the team are now back working in the office to support members.
BA Pensions increases communication with members
On March 17, the team had to temporarily reduce some of its member services such as its telephone service, because it was inundated with calls and had a significant backlog.
Mr Smart argues that this was a “very difficult decision”, but necessary to focus on high-priority areas such as ensuring pensions are paid and processing retirement payments.
It directed members to its online ‘contact us’ form to get in touch with the team, which called members to answer queries wherever possible.
The telephone service was reinstated at the beginning of August, which coincided with BA’s voluntary redundancy consultations.
Mr Smart says: “We knew our members really needed us at that particular point because they were making decisions about their future.”
BA Pensions has increased massively the volume of communication to keep members in the loop through regular updates, email alerts, frequently asked questions and guides.
More than 75 per cent of members are signed up to manage their pensions online, which puts the scheme in a “really good position” to communicate with members, Mr Smith notes.
It added a section with FAQs on Covid-19 to the website, and then a further set on BA’s voluntary redundancy programme.
Investment in technology has paid off. Its casework monitoring and reporting system has enabled the team to prioritise workloads to ensure high-priority tasks are delivered on time, while also helping members to make urgent decisions about their pension options.
In addition, using an outsourced mailing model for all incoming and outgoing post meant no change was needed during lockdown.
The scheme has introduced an online service to help members select their retirement options electronically using an online form.
“That saves a lot of time we spend in getting things up and running, but it also allows members to self-serve and greatly increases their confidence that they are in control, which is particularly helpful at this critical time,” Mr Smart says.
Over the next six to nine months, the scheme will develop a mobile app to provide members access to their pension information.
“That will leave us with more time to look after those members who prefer not to use that channel or more complicated issues,” he adds.
BA Pensions’ member services team, which has 27 member-facing staff, has taken on nine graduate-level temporary staff to help with the workload.
Mr Smart argues that this has enabled a straightforward process so the experienced administrators can focus on other things.
Schemes must prepare for end of furlough
Other pension schemes should start to prepare for significant rises in member-driven requests as the government’s furlough scheme closes at the end of October.
Girish Menezes, head of administration at Premier Pensions, notes that his company continues to be concerned about large-scale redundancy exercises, “which could drive some activity”.
Schemes must prepare for a tsunami of admin requests
As a result of the Covid-19 crisis, a tsunami of redundancy, early retirement and divorce requests is facing trustees and administrators, who need to work together to manage additional workloads, points out Cosan Consulting’s Mark Webster.
“The furlough programme has kept this in abeyance for the moment,” he notes.
Chris Tagg, board member at the Pensions Administration Standards Association, adds: “Given furlough will unwind towards the end of October, this problem is probably a bit further down the line for a lot of schemes as most sponsors are not yet at the point where they have to consider redundancies, but it is a possibility.
“It’s important to pre-plan and engage as early as possible with administrators, trustees, and actuaries.”
