Satisfying pension obligations in a digital and robotic world

Jennifer Tabb

By Jennifer Tabb
Head of Pension Risk Transfer Operations for Institutional Solutions at Massachusetts Mutual Life Insurance Co. (MassMutual).
Posted on Nov 14, 2022

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Review fiduciary considerations outlined in DOL Interpretive Bulletin 95-1 (IB 95-1)

Describe how MassMutual Institutional Solutions is engaging and serving annuitants digitally.

Share how we’re staying on the forefront of modern technology with robotics automation.
 
     

At MassMutual, we believe an insurer’s administrative and annuitant service-delivery models are essential elements in an insurer’s ability to completely satisfy its obligations to the annuitants. Aligned with our core mission of helping people secure their future and protect the ones they love; we are committed to providing an easy and secure digital experience for our annuitants serviced through our Pension Risk Transfer (PRT) business. And we believe it’s essential for plan sponsors to kick the tires on insurers’ administrative and annuitant service-delivery models when exploring group annuity solutions for their defined benefit plans.

In this blog, I’d like to share with you why we have this belief and how we work to accomplish our mission of helping our annuitant customers. To start, let’s review the Department of Labor (DOL) Interpretive Bulletin 95-1 (IB 95-1).

A review of DOL Interpretive Bulletin 95-1

The DOL outlined the fiduciary requirements for the selection of an annuity provider and evaluating prospective PRT insurers’ ability to satisfy the obligations of the group annuity contract. DOL Interpretive Bulletin 95-1 (IB 95-1) describes several factors the fiduciary must consider when evaluating annuity providers’ claims paying ability and creditworthiness. Consequently, insurer financial strength ratings are key areas of focus in the insurer review process. However, it’s important to note that IB 95-1 outlines additional considerations the fiduciary should take into account, and, as noted in The Voice of the Annuitant, administrative capabilities should be one of those considerations.

In an effort to satisfy the broader fiduciary requirements, we believe that a good first step when reviewing PRT insurers is to define “what does it mean to have the ability to satisfy a pension obligation through a group annuity solution?” The short answer is, not only is it about the ability to meet the obligation; it’s also the ability to administer the contract successfully over the long term.

In The Voice of the Annuitant, we include a list of “key questions when evaluating an insurer’s annuitant services.” Here, we’d like to share a bit about our modern digital services and components of our new experiences with robotics-based administrative processing.

An update on our digital service delivery

While we continue to offer “high touch” services, such as call center and account manager networks, the data around our customers digital activity on our website has demonstrated their appetite for more self-service offerings. In addition to our most basic initial digital offerings, such as the ability for annuitants to make address and bank account changes, we expanded our service capabilities to more complex offerings, such as benefit estimate calculations, last year.

More recently, we made it easier for survivors to interact with us by adding the ability to administer the death notification process digitally. Recognizing the sensitivity associated with life events and the impacts the event can have on a family, we were very thoughtful when expanding the digital service journey. We aimed to make the experience easy yet secure while using gentle nomenclature.

With the rollout of these features, we are seeing increased usage of the web portal to demonstrate that annuitants are adopting the functionality. In addition, our call center representatives are using this technology when serving annuitants. Our reporting indicates that over 50 percent of all web-enabled transactions processed January through August 2022 were completed using the digital option. 1

Below is a list of the top four most frequently accessed self-service options:

  1. Verification of Income
  2. Update direct deposit or automatic clearing house data
  3. Address changes
  4. Benefit calculations

Click here to learn more about our digital services.

Leveraging robotics for scale and efficiency

In addition to our broad range of digital offerings, we are beginning to incorporate in-house robotics solutions to modernize our PRT administration even further. Pairing front-end digital access with robotics-based back-office processing and continuing to enhance our processes in an efficient manner, we are scaling our ability to successfully administer pension obligations for the long-term.

Robotics capabilities allow us to leverage technology to complete components of processing activities such as:

  • Automatically imaging and indexing customer correspondence.
  • Initiating scheduled customer communications such as benefit election reminders.
  • Processing system transactions triggered by a customer, such as death benefit processing for certain scenarios.

The benefits of leveraging robotics include increased processing efficiency and decreased risks – such as those associated with manual error - which helps ensure successful pension annuity administration.

As our customers continue to engage with us, and new technologies become available, we will continue to identify applications for digital and robotics-based administration tactics that can bolster our proprietary administration model and our ability to administer the contract successfully over the long term.

Read our white paper: Leveraging modern digital and robotics technology to satisfy pension obligations.

At MassMutual, we offer plan sponsors and financial professionals confidence by helping ensure their fiduciary duties and pension obligations are satisfied. As a mutual company run for the benefit of its participating policyholders, we offer confidence through our enduring financial strength, our annuity solutions expertise, and our passion for helping people secure their future and protect the ones they love.

For more details on the annuitant experience, please read our white paper The Voice of the Annuitant. More information about our pension risk transfer services is available at our website here.

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1Proprietary MassMutual reporting, September 2022.

For Institutional Investors Only.

The information provided is not written or intended as specific tax or legal advice. MassMutual, its employees and representatives are not authorized to give tax or legal advice. You are encouraged to seek advice from your own tax or legal counsel. Opinions expressed by those interviewed are their own, and do not necessarily represent the views of Massachusetts Mutual Life Insurance Company.