The introduction of the two-pot pension fund system marked a significant shift for fund administrators, requiring them to engage directly with fund members rather than solely with employer groups. In the case of financial advisory firm NMG Benefits, this meant transitioning from managing interactions with 1,500 employer groups to handling inquiries and claims from up to 160,000 individual pension fund members.
Siphamandla Buthelezi, Head of Platforms at advisory firm, NMG Benefits, says that this shift necessitated innovation – at scale, and at pace. “Traditionally, pension fund administrators communicated with employers, who then relayed information to their employees. This is still the case for some of employee benefits, but when it comes to retirement funds the two-pot system means that, for the first time, fund members are talking to their fund administrators directly, and this brought about an urgent need for digital transformation.”
User-friendly digital platforms, including AI-powered mobile apps, online portals, and automated emails and SMSs, are the first solutions that spring to mind when a provider wants to facilitate seamless interactions. But, given the very specific and heavily regulated conditions of the two-pot system, very little existed in this arena when fund members were first allowed to claim in the 2024-25 tax year.
Buthelezi says that developing these tools not only provided 24/7 convenience for their fund members, but it also empowered them to withdraw funds easily and quickly. “Our purpose-driven tech innovations allow our members to access and update their information, check their fund balances, and initiate transactions independently thus ensuring faster processing. Innovation enables us to handle routine queries, provide instant responses to common questions, and guide our members through the claims processes.”
With the surge in direct interactions, many administrators initially struggled to manage member queries effectively, and this led to NMG prioritising the development and implementation of advanced query management (ticketing) systems to categorise and track inquiries, identify cases where members had made multiple enquiries, and ensure meaningful and timely responses. The value of multi-channel communication strategies that incorporate email, WhatsApp, SMS, and in-app messaging very quickly came to the fore – especially given the challenges of communicating with members who work in mines, often do not have smart phones, and are underground for days at a time, as an example.
Buthelezi explains that another major challenge lies in the need to facilitate fund withdrawals despite data inconsistencies and inaccuracies, saying that where incorrect tax and contact phone numbers, and other details provided by employers delayed payments, therefore that impacted the claims process. By leveraging data validation tools and integrating with national databases like those at SARS and also allowing members to update their own data via the app, NMG Benefits was able to bridge this gap.
“The introduction of the two-pot system presented a transformative moment for pension fund administrators. Our innovations not only addressed immediate challenges but also set a new standard for efficiency and accessibility. More education is still needed around the two-pot system in terms of how it works. Language barriers and access to information are some of the key issues that still need to be addressed. Says, Buthelezi.
