It’s something we all know is coming, yet somehow, it is nearly always a surprise. We’re speaking here about one of the two inevitabilities of life, and we don’t mean taxes. When you’re setting up systems and processes for your benefits package, you’re usually ready to process retirements, changes at open enrollment time, and the other events that commonly occur. Somehow, the death of a participant is often processed like an afterthought. Kevin Nolan of Buck Consultants advises clients to remember three things: people, process, and technology.
When a death occurs, beneficiaries are experiencing an obviously difficult time. Multiple requests for information like death certificates, or multiple condolence letters coming from different departments, leave an impression that the company is disorganized. Disorganization costs more for the company, too. “Any time you’re delivering administration services, there will always be cost savings if you do it more efficiently,” says Nolan.
To guard against these problems and ensure you’re processing employee deaths as efficiently as possible, Nolan recommends forming a process review team every few years. Not only will frequent reviews ensure that newer employees understand what to do, they also allow you to take advantage of new technologies. “Whether you do this yourself or you get a consultant involved, it should be interdisciplinary,” Nolan suggests. “Because there are many people involved, it needs to be clear who has responsibility for guiding the whole thing, so it doesn’t get bogged down.”
Administration, technology, and compliance should all be represented on the team. “Technology could be something as simple as beneficiary forms: do you have an effective way of maintaining beneficiary forms over time? Do you allow retirees or inactive participants to update their beneficiary designations online, or do you do it by paper? If you do it by paper, do you then image the paper, or is it a piece of paper stuck in a file that you hope you can find at the time? Remember people, process, and technology.
“The people side of things comes in on how you organize everyone to do what needs to be done.” Nolan continues. “Who is sharing what information with whom? Who has what responsibilities? What is expected of everybody? Is that all clearly laid out? You should expect your people to move up, and when they do, others should be able to take over. You deal with that through documentation, planning, organization, and training. Many companies are not prepared for that.
“From a compliance standpoint, are you operating the plan in the way the plan is written, or are you doing things administratively that may be outside of what the plan says? You may be doing what was intended but it may not be exactly how the plan was written. That’s why compliance people should be involved.”
Focus on the outcome, Nolan says, which is making things better for the beneficiary. As a result of that, you may find the company saving time and money as well.