Top Reasons Why Pension Administration Is Difficult to Implement

Overview

PeopleSoft Pension Administration has a reputation for being more complex and challenging to implement. This article outlines the top ten reasons why implementation can be difficult.

The goal is not to discourage implementation, but rather to better understand and prepare for implementation.

Implementation Challenges

Sometimes it’s hard to pinpoint exactly why implementing PeopleSoft Pension feels more challenging compared to other PeopleSoft applications. They all require hard work to implement and have their unique challenges.

Functional requirements unique to administering pension plans drive many of the implementation challenges. Depending on the organization’s needs, some known product functionality gaps may add to the implementation efforts. Ultimately, specialized skills and experience are crucial for effectively navigating implementation tasks.

Historical Data

Pension Calculations often require employment and payroll data from the member’s full work history, which may have been maintained in various formats and systems throughout their career. Imagine having to generate a W-2 for a retiring member’s first year of employment. Do you have that data in your system?

The delivered design assumes that all historical data will be converted to standard HCM/Payroll tables or a pension copy of the payroll tables that utilize the same complex structure.  Often, custom-developed options are required to store, maintain, and utilize historical data, taking into account the format of the available data and the end-user’s maintenance requirements.

Impacts conversion efforts. Often requires customization development efforts to store and maintain historical data. Increases the chance of encountering data quality challenges.

Historical Rules

Plan Rule Provisions change often and never expire.  The benefit can never be less than what was accrued under the old rules, so all historical rules may need to be included in the calculation configuration.  Configuration options support plan rule changes over time that may impact various subpopulations but require additional effort to implement. 

Impacts configuration efforts.

Unique Rigid Rules

Software must handle Plan Rules, Statutes, Collective Bargaining Agreements, and historical administrative practices to ensure accuracy and consistency.  If these rules don’t fit the configuration options, customization is required.  Other types of applications may be able to adopt the best practices supported by the application, but not Pension. Rules for Pension Plans, especially those in the public sector, which often have fewer regulations, can vary widely.  Contrast this with accounting or payroll tax rules, which are relatively consistent across all organizations.

Impacts configuration and customization development efforts.

Major Functionality Gaps

Significant functionality gaps need to be overcome.  The product has been in sustaining support mode for over a decade, while the client expectations and competitor offerings have been increasing.

Retiree Payroll Integration, Self-Service Capabilities, Case/Workflow Management, and Employer Reporting are some common gaps addressed by Clients.

Impacts customization development efforts, which are required to fill significant gaps.

Configuration Capability Gaps

Plan Rules are often not supported by the configuration options.  Because there are only two major calculation processes that work end-to-end, bolt-on customizations to fill gaps are challenging to design, develop, and maintain.  COBOL customization is often the best, most direct path to filling gaps.  Several implementation challenges are associated with this reality, including resistance to COBOL modifications, limited developer resources, and infrastructure issues related to COBOL compilation and migration.

Every implementation encounters different configuration gaps, but almost all encounter challenges related to Database Aliases, Table Lookup Aliases, and Projection Options.  Other challenging areas are Enrollment, Projected Retirement Eligibility Date, Employment Transfers, and more. Most implementations also encounter issues with sizing COBOL arrays.

The PSPA Tech Enhancement Lab explores innovative and powerful solutions to overcome configuration limitations and enhance product flexibility.

Impacts COBOL customization development efforts. A competent COBOL resource is likely required.

Overcoming Poor User Experience of Transactional Design

The product is based on a collection of transaction pages loosely connected via menu navigation.  This provides a clumsy, cumbersome, difficult-to-use user interface with a steep learning curve for users to overcome. 

A quality implementation includes customizations that streamline user steps and effectively manage work queues and tasks.  Sometimes, the user experience is improved by implementing Case Management; however, developing the integration with HCM is challenging, and the result is not ideal.  Other approaches include developing custom case management capabilities within HCM and may extend to automating the setup of new benefits for Retiree Payroll.

Additional enhancements have been developed to process member retirements in batches, run processes, and review key case elements in a list format to triage complex cases that require attention.

Impacts customization development efforts required to improve the User Experience.

Inbound/Outbound Integrations

The product does not provide Employer Reporting or external system integration capabilities that may be necessary to collect data updates for active members. Often, not all members are managed and paid by PeopleSoft.  Source data frequently needs to be transformed to fit the target data structure and adjusted for specific pension requirements.

The product offers a Trustee Extract process, designed to facilitate pension payments through a third-party service.  However, some clients prefer to use PeopleSoft Payroll to issue pension checks, and each has had to develop its own solution to address this common functionality gap.

Integrations have been the downfall of large projects, particularly attempts to circumvent the PeopleSoft interface using CRM, Salesforce, etc.  Overzealous architects sometimes design integrations that make the project more complex than necessary to implement and maintain, without significant benefits.

Impacts customization development efforts for data collection integrations and/or retiree payroll.

Implementation Methodology

Using a waterfall methodology for implementations often leads to late surprises that impact the project timeline.

The configuration options and related PeopleBooks information lead implementors to believe a plan rule requirement can be met satisfactorily.  During the fit/gap and design phases of a project using waterfall methodology, a false sense of confidence or inaccurate effort estimates can easily be obtained. 

The product lends itself to a more agile, rapid-prototyping approach for implementation, which helps identify gaps quickly. However, this better approach often does not align with project governance.  An end-to-end working process can be set up relatively quickly, followed by iterative efforts to refine individual calculation components.

Impacts project planning and timelines.

Hierarchical Parameter Configuration

Pension Administration utilizes a highly flexible, hierarchical configuration structure that can easily reference and reuse other configuration components; however, this does make it more challenging to manage, report on, or migrate the configuration compared to other applications with a flatter, wider configuration schema.  The learning curve is steeper because the configuration user interface provides little help in easily linking to referenced components. Adopting a good naming convention is crucial for creating a maintainable set of configuration elements.

PSPA Implementation Management Utilities can help with the burdens of complex configuration data.

Impacts resources with limited Pension Administration experience.

This also impacts developers new to PeopleSoft Pension, as the path through the programs is heavily dependent on this complex configuration hierarchy, and a thorough understanding is required to support or customize the application.

Service Purchase Difficult to Implement

New to 9.2, the Service Purchase functionality is challenging to implement, slightly more buggy than other components, and sometimes requires extensive customization to function properly.

Impacts configuration and customization development efforts.

Correspondence and Extracts

All Reports, Correspondence, and Data Extracts will need to be custom-built.  Even delivered Trustee Extract and Actuarial Extract are often replaced by custom processes or heavily modified.

Impacts customization development efforts.

Summary

• Implementation complexity stems from historical data handling, unique plan rules, and functionality gaps.
• Customization, often including COBOL modifications, is typically necessary to meet specific requirements.
• Client architecture may require complex integrations.
• User experience improvements and workflow solutions are crucial for efficient system use.
• PeopleSoft Pension Admin is in sustaining support, receiving minimal updates, and lacks some modern features.

Additional Resources