Co-op stakes claim in online stakeholder pensions market

Co-operative Insurance Society (CIS) has developed an online stakeholder pension service in a multi-million pound implementation...

Co-operative Insurance Society (CIS) has developed an online stakeholder pension service in a multi-million pound implementation based on pension administration software from Marlborough Stirling.

The 10-month implementation, worth £3m, allowed CIS to accept stakeholder pension applications from the new pension's launch date last month.

While many pension giants have chosen to develop stakeholder systems in-house, CIS said it was cheaper and more efficient to develop a stakeholder pension based on a product from a supplier.

CIS used Marlborough Stirling's pensions administration system, Lamada, to handle stakeholder pension applications and queries through its Web site and call centre.

The software package also includes a calculation engine to ensure consistent calculations across the stakeholder service.

With strict limits placed on stakeholder charges, pension providers are keen to use the Web to cut administration costs and avoid crippling overheads

Under government regulations pension companies can only charge customers a maximum of 1% of the total value of the stakeholder funds' total value.

Steve Fox, life and pensions new business administration manager at CIS, said, "We went with the Marlborough Stirling package because it had a lot of established life and pensions functionality and we felt that it was a more cost-effective solution to go externally."

A number of other pension providers, including Clerical Medical, are using the Marlborough Stirling system for stakeholder services according to Fox.

He added, however, that the CIS stakeholder offering was still able to offer different functionality to rivals using the same software.

"Stakeholder is a generic type of product. In Lamada there is a lot of core functionality, such as administration and investment processing," Fox said.

The CIS stakeholder service required more than 20 interfaces between existing CIS IT systems and the new pension system. Marlborough Stirling developed one of the key interfaces for uploading customer application details from the Web site and sales force laptops to back-office systems.

The remaining interfaces - mainly overnight and batch-based - were developed in-house by CIS.

"We did most of the integration with our existing systems. We identified a number of areas which required customisation on taking the [Marlborough Stirling] package. However we tried to limit the amount of customisation," added Fox.

Nick Huber

[email protected]

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