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Situation Analysis: ClientCo senior management sought to make competitive inroads in the North American retirement services market by more accurately targeting the purchase-related priorities of its plan sponsors and participants. Most investment was earmarked for the Defined Contribution segment, but the high-margin Defined Benefit [DB] business was expected to maintain its current customer base and optimize profitability.

ClientCo's internal team attempted cost-reduction and service improvement but was soon challenged by the operational and regulatory complexities of the numerous DB plans. The team perceived minimal revenue expansion opportunity was perceived for the DB annuitant base.

Improvements Identified: The Lab conducted an eight-week analysis using its standard template-based approach. Special emphasis was placed on understanding the service needs and purchase priorities of DB plan annuitants, since plan sponsors were often trustees and other passive entities. Examples:

1. Premature Automation — DB plans contained numerous, complex stipulations and procedures which had been revised over time. Archival methods and revision documentation were historically ad hoc and informal. New technology was rapidly deployed prior to standardization and cleanup of manual procedures. Backlogs rose, service quality declined, and customers grew dissatisfied. Subsequent process standardization and simplification reduced this service-quality erosion.
2. Customer Over-service — Annuitants often queried the service staff about their balances and monthly payment amounts. Although only broad estimates were needed, no capability existed to provide these approximations. Costly estimates with long lead times were replaced by quick reference tables saving actuarial costs and reducing inbound queries.
3. Lack of Service-Level Targets — A lack of market-based service benchmarks meant that service cycle times grew to unacceptable levels, particularly after the technology deployment. Changes to the customer master data file eventually required 30 days. Market competitors averaged 3 days—U.S. government agencies [e.g., Social Security] met a 7-day goal.
4. Unmet Customer [Annuitant] Needs - The Lab's Customer Value Analysis identified DB customers’ interest in investment advice and a broad range of non-DB financial products.

Overall Results: The Lab assisted the ClientCo team with a six-month, self-funding implementation effort that rapidly delivered hard-dollar savings and service gains beginning in month number two.