The pension management industry has undergone a technological revolution, moving away from paper- and spreadsheet-based reporting to embrace web-based solutions. But it has only just scratched the surface of what technology can do. The next step is to leverage the Internet to improve collaboration of pension executives and their service providers to combine efficiently their respective sets of analytics to improve decision-making.
The global financial crisis has been the most notable recent catalyst for change in the pensions industry. The crisis — and ensuing downside market volatility — knocked billions of dollars off the value of assets of global pension plans before many could act. Once bitten, plan executives quickly became mindful of the need to manage risk more carefully. It was evident that waiting several days or weeks for information from investment managers, investment consultants, actuarial consultants and custodians was simply not a viable option, especially with funding levels having the potential to swing significantly while information to make a decision was prepared. Even though pension plans work on long-term horizon from an investment perspective, certain critical events need to be addressed rapidly to maximize benefits and minimize losses.
The result is that much of the industry is embracing web-based applications, allowing them to far better understand — and in real time — funding positions and sensitivities to market conditions.