PMI Crest
25 September 2020

4th ITM Student Essay Competition - Alexander Economides

Covid-19 has changed the way people and companies in the pensions industry are working. Will these become permanent changes in working practise, operational delivery and communication or will old habits and methods return? What can we learn from the current practices and what does the speed of change since restrictions were imposed tell us?

The times, they are a-changing

Covid-19 has presented each of us with personal and professional challenges. At its worst, it has brought tragedy. However, as this essay competition demonstrates, people are also beginning to talk about potential upsides to the new ways of working which we have adopted. The pensions industry has had to dig very deep, finding new levels of resilience and innovation in response to the crisis, often highly successfully. This raises an interesting point: as well as examining the pros and cons of our "new normal", isn't it just as important to be thinking critically about old habits? Rather than assuming they will return, shouldn't we be asking ourselves how far we can (and should) make the effort required to reinstate them? I will be approaching these questions from a lawyer's perspective, but the answers go well beyond the purely legal.

Working practices

Like most industries, the last two decades or so have already seen a steady shift towards more agile working patterns within pensions. A significant number of firms across the pensions industry, from independent trustees to administrators and all types of adviser, have successfully operated in a largely or wholly dispersed way for many years now. Covid-19 has undoubtedly accelerated this: for example, the achievement of many pensions administration teams in moving to a wholly remote member services model within a matter of weeks should not be underestimated. There are also more general signs that remote working could become the default option for many former office workers: as a result of the Covid-19 crisis several large companies including Twitter and Facebook have announced that they intend to allow permanent remote working for those employees who want it.

For organisations who can implement it effectively, there are clear potential benefits to be realised from increased agile working, including opportunities to reduce costs whilst maintaining or even increasing productivity. Employees can also benefit from this model on a personal level – for example, many of my colleagues at Travers Smith have remarked on the benefits of the absence of a daily commute and the opportunity to spend more time with families. Having been forced by Covid-19 to adopt a fully remote working model, initial reluctance may, for some, now be starting to be replaced with a realisation that it could prove to be a silver lining of the lockdown experience.

Against this backdrop, we might also ask: is the office-based model really so beneficial that it should definitely return in its old form?  Pre-Covid-19 there was already a growing discussion among journalists and academics about the disadvantages of some office-based approaches, such as the potentially detrimental effects of open-plan working on employee productivity and wellbeing.

On the other hand, office life has very significant advantages for fostering informal knowhow sharing and team cohesion. Nor is remote working a panacea.  Its challenges won't all be easy to address. There are some unanswered questions about the mental health implications of remote working. It also requires managers to trust their employees to make decisions about how best to get their work done; and the right technology infrastructure is essential. There are also some legal issues to consider such as maintaining appropriate data protection and security measures as part of a home office set-up.

Critically, in order to get the best of both worlds, both team members and line managers will need to be much more proactive about how they communicate – with greater frequency, regularity and consistency in the methods used. This will help maintain the strength of teams, promote collaboration, and avoid disintegration into silos.

Despite the challenges, current evidence suggests that the move towards agile working may well be here to stay. A survey of over 300 CFOs carried out by Gartner at the start of April suggested that 25% of CFOs intend to shift a quarter or more or their workforce to permanent remote working. The extent to which these changes will be reflected in the pensions industry remains an open question, but a full reinstatement of pre-Covid-19 working practices currently looks unlikely.

Internal communications

The way that we communicate within organisations has undergone a significant change over recent years, with an ever-proliferating range of new technologies promising to enhance our productivity as individuals and teams. Covid-19 has pushed these technologies to the fore as part of agile working. This has led to benefits such as more frequent and richer communication for teams, and more rapid decision-making by groups who are geographically separated.

However, we should remember that pensions law demands high-quality decision-making. There is a risk that changing the method of communication could lead to shifts in how effectively boards or committees communicate, both among themselves and with their advisers. For example, decisions may be rushed for no better reason than that it's now possible to convene a meeting quickly; or it may be more difficult for individual trustees to challenge a prevailing view or a recommended course of action without the benefit of in-person deliberation and the non-verbal cues which form such a large part of how we ordinarily communicate. Many contacts have spoken about how the Chairperson's role has become even more intensive since lockdown, with significant additional effort required to keep remote meetings on track and ensure that everyone gets a chance to be heard. There are also more mundane (but no less important) challenges like ensuring everyone has sufficiently reliable technology to fully participate in meetings. Whilst many multinational organisations have been successfully running large global teams and projects for decades without frequent in person meetings (so these challenges are not insurmountable) this does seem like an area where the value of returning to something resembling the pre-Covid-19 status quo could be judged to be worth the effort.

Member communications

Covid-19 also seems likely to have an impact on communication with scheme members. Where paper documents might previously have been favoured, lockdown has forced the issue of electronic communications and whether members are willing and able to receive these.  There are opportunities here: along with the clear sustainability benefits of electronic rather than hard copy communications, this shift could enable the industry to start using the inherent flexibility of digital communication, creating more focussed communications - tailored to the circumstances of individual members and ensuring they get the right messages, in their preferred format, at the most relevant time for them.

If the shift towards electronic communications is maintained, there will be legal considerations around ensuring that schemes continue to comply with their disclosure obligations. For example, when certain basic scheme information is updated it is unlikely to be sufficient to update a page on the scheme's website or app without informing members, as in some circumstances the law imposes a positive obligation on trustees to notify members within set time periods. There will therefore need to be protocols established around what information is sufficiently important (or legally required) to warrant being actively notified to members, whilst bearing in mind that members won't want to be overloaded with notifications which they see as unnecessary or irrelevant. So, when we look at retaining the best of the old methods, it seems there could still be benefits to having a regular and predictable member communication cycle built around key correspondence like annual benefit statements.

A more fundamental question is how Covid-19 should prompt the industry to 'speak' to members, bearing in mind the likely economic and psychological effects of the current crisis. In addition to immediate concerns such as protecting members from pension scams or knee-jerk investment changes, I would suggest that the industry will also need to consider the potentially longer-lasting impacts of this crisis in order to communicate effectively with members into the future. For example, historical evidence suggests that people who lived through the Great Depression tended on aggregate to be more risk-averse than previous generations throughout the rest of their lives, even once their economic fortunes had improved. As one commentator has put it, "wounds heal, scars last".

So, although a member-focussed communication style was already becoming more widespread before Covid-19, this may be an area where it becomes right for the industry not only to restore its approach to this emerging trend, but perhaps to double down on it, given all of the competing claims on members' attention and finances in a world which, for many, will have suddenly become much more worrying and uncertain.

Operational delivery

The first weeks of the Covid-19 crisis clearly demonstrated the importance of robust business continuity plans. As we enter a period of potentially varying levels of lockdown which could change at short notice, we will all need to show flexibility and the ability to adapt our operational delivery to the situation in which we find ourselves. An overly rigid commitment to any particular model of operational delivery seems likely to be overtaken by events, so pragmatism and a willingness to learn from others would seem to be the order of the day.

At a scheme level, the current crisis has prompted many schemes to move to more frequent meeting cycles and increasing delegation to sub-committees and executive officers. When combined with increased use of technology, this can result in a more agile and iterative governance approach. Although potentially helpful in some cases, as discussed above, if taken too far this can also risk watering down the high standards of governance and internal controls expected by scheme members and regulators, particularly in areas such as investment. In a similar vein, the increasing move towards automation of some scheme processes as part of schemes' resilience planning could also create challenges: in some areas, such as genuine discretionary decisions, the law is not yet as ready to accept automation. There is a case to be made here in favour of restoring the old pre-Covid-19 practices.

On a more positive note, being pushed into new modes of operational delivery by the Covid-19 crisis may yield benefits for organisations in the long run. For example, the capacity constraints imposed by this crisis have pushed the industry to focus on the quality and consistency of core processes, as well as encouraging greater investment of time in different areas of risk management more generally. The next crisis (whenever it arrives) will almost certainly be different from Covid-19, and so will be the specific responses it requires, but the collective experience gained as a result of this crisis could still provide valuable lessons for operational resilience.

We may also find that the rapid shift towards agile working and technology-based operational solutions means that in future it becomes easier to quickly scale particular services up or down to deal with major new projects or spikes in demand. Such a shift would clearly present challenges (such as maintaining organisational culture and knowledge), but it could also open up possibilities for a larger number of part-time or "on demand" roles, which research suggests may also assist organisations in developing a more diverse workforce.


As with most predictions, it's highly likely that the future will play out differently to how we all expect. Perhaps the real value comes from the imaginative exercise itself, and the fact that these times of rapid change enable us to ask where, and what, value truly lies in the ways we used to do things. Crises force us to create alternatives and actively consider possibilities which otherwise would have seemed too ambitious, or too far removed from comfortable habits or received wisdom.

Whatever the future holds, the fact that the pensions industry has adapted so quickly to the unprecedented challenges created by the Covid-19 crisis and that members are (for the most part) being paid their benefits as normal should give us good reason to feel positive about the industry's ability to meet future challenges with confidence.


back to Articles

Last update: 1 October 2020

Alexander Economides
Alexander Economides
Travers Smith

Pensions Projects Specialist – Very Flexible working

Salary: £35000 - £45000 pa

Location: Essex or Hampshire – Very flexible working

Pensions Quality Analyst

Salary: £25000 - £40000 pa

Location: Work for Home or Office locations countrywide

Client Relationship Manager

Salary: £30000 - £50000 pa

Location: Bristol / Home based with need to attend Bristol office

You may also like:

6th ITM Student Essay Competition: runner-up Camilla O’Brien
15 September 2021

6th ITM Student Essay Competition: runner-up Camilla O’Brien

To what extent will an increased focus on ESG (Environmental, Social, and Governance) improve member outcomes?

Read more
6th ITM Student Essay Competition: runner-up Clare Bryant
15 September 2021

6th ITM Student Essay Competition: runner-up Clare Bryant

To what extent will an increased focus on ESG (Environmental, Social, and Governance) improve member outcomes?

Read more