[et_pb_section fb_built="1" _builder_version="4.27.4" _module_preset="default" use_background_color_gradient="on" background_color_gradient_stops="rgba(0,28,63,0.65) 0%|rgba(0,28,63,0.71) 100%" background_color_gradient_overlays_image="on" background_image="https://www.cembenchmarking.com/wp-content/uploads/2024/12/dataPrincples-cover.jpg" height="370px" hover_enabled="0" locked="off" global_colors_info="{}" theme_builder_area="et_body_layout" title_text="Forex diagrams and stock market rising lines with numbers" sticky_enabled="0"][et_pb_row _builder_version="4.27.4" _module_preset="default" custom_padding="50px||50px||true|false" hover_enabled="0" global_colors_info="{}" theme_builder_area="et_body_layout" make_equal="on" sticky_enabled="0"][et_pb_column type="4_4" _builder_version="4.27.4" _module_preset="default" global_colors_info="{}" theme_builder_area="et_body_layout"][et_pb_heading title="@ET-DC@eyJkeW5hbWljIjp0cnVlLCJjb250ZW50IjoicG9zdF90aXRsZSIsInNldHRpbmdzIjp7ImJlZm9yZSI6IiIsImFmdGVyIjoiIn19@" _builder_version="4.27.4" _dynamic_attributes="title" _module_preset="default" title_text_align="center" title_text_color="#ffffff" title_font_size="40px" width="80%" width_tablet="80%" width_phone="90%" width_last_edited="on|desktop" module_alignment="center" hover_enabled="0" global_colors_info="{}" theme_builder_area="et_body_layout" sticky_enabled="0" title_font_size_last_edited="on|desktop" title_font_size_phone="30px" title_font_size_tablet="40px"][/et_pb_heading][et_pb_text _builder_version="4.27.4" _module_preset="default" text_text_color="#ffffff" text_font_size="21px" locked="off" global_colors_info="{}" theme_builder_area="et_body_layout"]<p style="text-align: center;">Pension Administration Insights</p>[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section][et_pb_section fb_built="1" _builder_version="4.27.4" _module_preset="default" custom_margin="0px||-1px||false|false" custom_padding="||2px|||" global_colors_info="{}" theme_builder_area="et_body_layout"][et_pb_row _builder_version="4.27.4" _module_preset="default" width="100%" custom_margin="-40px||0px||false|false" custom_padding="||0px||false|false" global_colors_info="{}" theme_builder_area="et_body_layout"][et_pb_column type="4_4" _builder_version="4.27.4" _module_preset="default" global_colors_info="{}" theme_builder_area="et_body_layout"][et_pb_text _builder_version="4.27.4" _module_preset="default" text_font="||||||||" text_orientation="center" width="80%" width_tablet="80%" width_phone="80%" width_last_edited="on|phone" module_alignment="center" custom_margin="-18px||2px||false|false" global_colors_info="{}" theme_builder_area="et_body_layout"]<p>[publishpress_authors_data field="display_name" seperator=", "]</p>[/et_pb_text][et_pb_text _builder_version="4.27.4" _dynamic_attributes="content" _module_preset="default" text_font="||||||||" text_orientation="center" custom_margin="||||false|false" global_colors_info="{}" theme_builder_area="et_body_layout"]@ET-DC@eyJkeW5hbWljIjp0cnVlLCJjb250ZW50IjoicG9zdF9kYXRlIiwic2V0dGluZ3MiOnsiYmVmb3JlIjoiIiwiYWZ0ZXIiOiIiLCJkYXRlX2Zvcm1hdCI6ImN1c3RvbSIsImN1c3RvbV9kYXRlX2Zvcm1hdCI6IkYsIFkifX0=@[/et_pb_text][/et_pb_column][/et_pb_row][et_pb_row _builder_version="4.27.4" _module_preset="default" width="15%" module_alignment="center" custom_padding="15px||0px||false|false" global_colors_info="{}" theme_builder_area="et_body_layout"][et_pb_column type="4_4" _builder_version="4.27.4" _module_preset="default" global_colors_info="{}" theme_builder_area="et_body_layout"][et_pb_code _builder_version="4.27.4" _module_preset="default" global_colors_info="{}" theme_builder_area="et_body_layout"]<script><!-- [et_pb_line_break_holder] -->const copyBtn = document.getElementById('copyURL');<!-- [et_pb_line_break_holder] --><!-- [et_pb_line_break_holder] -->copyBtn.addEventListener('click', () => {<!-- [et_pb_line_break_holder] -->  const url = window.location.href;<!-- [et_pb_line_break_holder] -->  navigator.clipboard.writeText(url).then(() => {<!-- [et_pb_line_break_holder] -->    alert('URL copied successfully!');<!-- [et_pb_line_break_holder] -->  }).catch(() => {<!-- [et_pb_line_break_holder] -->    alert('Error copying URL to clipboard');<!-- [et_pb_line_break_holder] -->  });<!-- [et_pb_line_break_holder] -->});<!-- [et_pb_line_break_holder] --></script>[/et_pb_code][/et_pb_column][/et_pb_row][et_pb_row column_structure="3_5,2_5" use_custom_gutter="on" gutter_width="1" _builder_version="4.27.4" _module_preset="default" width="70%" custom_padding="||0px||false|false" hover_enabled="0" global_colors_info="{}" theme_builder_area="et_body_layout" sticky_enabled="0" module_alignment_last_edited="on|tablet" module_alignment_tablet="center" width_last_edited="on|phone" width_phone="90%" module_alignment="center" module_alignment_phone="center" width_tablet="70%"][et_pb_column type="3_5" _builder_version="4.27.4" _module_preset="default" global_colors_info="{}" theme_builder_area="et_body_layout"][et_pb_text _builder_version="4.27.4" _module_preset="default" custom_margin="|42px|||false|false" hover_enabled="0" global_colors_info="{}" theme_builder_area="et_body_layout" sticky_enabled="0" text_orientation_last_edited="on|phone" text_orientation_phone="center" width_last_edited="on|phone" width="93%" width_phone="90%" width_tablet="93%"]<p>Insights from CEM Benchmarking's annual Pension Administration Survey consistently highlight key industry trends each year, and one of the most critical currently is the modernization of legacy systems. This is not just a background task; it is a strategic priority. Our 2024 survey data shows that a significant 46% of participating global pension funds are replacing their central administration system, and 40% finished doing so within the past five years. This trend extends to related systems like CRM, member and employer portals, and HR interfaces, all to improve member experience and how efficiently things run.</p>
<p>To explore these changes further, we discussed the details of modernization with Edsart Heuberger, the Product Manager for our Pension Administration Benchmarking Subscription. His insights and our wide range of data paint a clear picture of the challenges and opportunities facing pension administrators today.</p>
<p>&nbsp;</p>[/et_pb_text][/et_pb_column][et_pb_column type="2_5" _builder_version="4.27.4" _module_preset="default" global_colors_info="{}" theme_builder_area="et_body_layout"][et_pb_image src="https://www.cembenchmarking.com/wp-content/uploads/2025/04/ChatGPT-Image-Apr-9-2025-05_23_52-PM.png" title_text="Legacy systems" _builder_version="4.27.4" _module_preset="default" global_colors_info="{}" theme_builder_area="et_body_layout"][/et_pb_image][/et_pb_column][/et_pb_row][et_pb_row _builder_version="4.27.4" _module_preset="default" width="70%" custom_padding="30px||||false|false" hover_enabled="0" global_colors_info="{}" theme_builder_area="et_body_layout" width_last_edited="on|phone" sticky_enabled="0" width_phone="90%" width_tablet="70%"][et_pb_column type="4_4" _builder_version="4.27.4" _module_preset="default" global_colors_info="{}" theme_builder_area="et_body_layout"][et_pb_heading title="Why Modernize Now? The Twin Drivers of Change" _builder_version="4.27.4" _module_preset="default" title_level="h2" title_font_size="24px" custom_margin="||10px||false|false" global_colors_info="{}" theme_builder_area="et_body_layout"][/et_pb_heading][et_pb_text _builder_version="4.27.4" _module_preset="default" global_colors_info="{}" theme_builder_area="et_body_layout"]<p>The decision to take on the complex and often expensive process of system modernization typically comes down to two main reasons:</p>
<p><strong>Ensuring Business Sustainability</strong><strong>:</strong> Legacy systems eventually become outdated. As Edsart notes, " It really comes down to issues with the long-term sustainability of the current pension administration system.” This challenge is threefold: technical debt grows, internal staff with the knowledge and skills required to maintain the legacy systems are retiring and difficult to replace, and third-party vendor support fades over time. Modernization becomes necessary to keep things running smoothly and reliably.</p>
<p><strong>Meeting Evolving Member Expectations:</strong> Today's members benchmark their service experiences against other industries, which are often far ahead of the pension sector technologically. "Member expectations are higher than ever before. Both members and employers engage with companies that provide superior (digital) experiences," Edsart explains. Failing to modernize risks reduces member trust and satisfaction. Outdated technology limits the ability to modernize business processes, improve digital member engagement, and better decision-making by using data analytics. This drive for a better member experience often requires the adoption of cloud computing, especially as organizations start to use AI and machine learning.</p>
<p>While improving the member experience is crucial, modernization is equally about achieving "operational excellence." This means optimizing processes, increasing efficiency, reducing waste, and ultimately delivering better service at a reasonable cost. Modern systems allow for automation and streamlined workflows that are impossible with outdated technology.</p>[/et_pb_text][et_pb_code _builder_version="4.27.4" _module_preset="default" global_colors_info="{}" theme_builder_area="et_body_layout"][/et_pb_code][et_pb_heading title="The Shifting Landscape: From In-House Control to Third-Party Partnerships" _builder_version="4.27.4" _module_preset="default" title_level="h2" title_font_size="24px" custom_margin="||10px||false|false" custom_padding="0px|||||" global_colors_info="{}" theme_builder_area="et_body_layout"][/et_pb_heading][et_pb_text _builder_version="4.27.4" _module_preset="default" custom_margin="||||false|false" global_colors_info="{}" theme_builder_area="et_body_layout"]<p>In the past, many pension plans have preferred developing and managing their administration systems in-house. "Plans used to do a lot in-house because of the complexity of their business, and so they could control the service they provided," says Edsart.</p>
<p>However, more plans are partnering with third-party service providers and vendors in recent years. "The rate of technological change is high," Edsart observes. “Plans are clearly considering their ability to keep pace with this change. That said, we still observe that plans that use custom off-the-shelf solutions require a significant degree of customization”—a quarter of plans implementing a custom off-the-shelf solution still required more than 90% customization.</p>[/et_pb_text][et_pb_heading title="Beyond the %22Big Bang%22: Evolving Modernization Approaches" _builder_version="4.27.4" _module_preset="default" title_level="h2" title_font_size="24px" custom_margin="||10px||false|false" custom_padding="0px|||||" global_colors_info="{}" theme_builder_area="et_body_layout"][/et_pb_heading][et_pb_text _builder_version="4.27.4" _module_preset="default" custom_margin="||||false|false" global_colors_info="{}" theme_builder_area="et_body_layout"]<p>The specific approach to modernization is also changing. The traditional "Big Bang approach” – a total replacement often taking 5-10 years and costing large amounts – is an immense project.</p>
<p>Edsart notes a shift in mindset with plans that modernized more recently: "Many plans have modernized their systems in a way, so it is easier to continually update, avoiding future big-bang modernizations." This points to moving to a more flexible, adaptable system design that supports continually improving instead of less frequent, more extensive replacements.</p>[/et_pb_text][et_pb_heading title="Choosing Your Path: Build Strategies and Customization Realities" _builder_version="4.27.4" _module_preset="default" title_level="h2" title_font_size="24px" custom_margin="||10px||false|false" custom_padding="0px|||||" global_colors_info="{}" theme_builder_area="et_body_layout"][/et_pb_heading][et_pb_text _builder_version="4.27.4" _module_preset="default" custom_margin="||||false|false" global_colors_info="{}" theme_builder_area="et_body_layout"]<p>Despite the trend towards vendors, the picture is not that simple. Our data shows:</p>
<ul>
<li><strong>58% of plans still rely on their own developed systems.</strong> Within this group:
<ul>
<li>43% built or are building the system primarily using internal resources.</li>
<li>15% initially had their "in-house" system built from scratch by a third-party vendor.</li>
</ul>
</li>
<li><strong>40% use an existing third-party platform.</strong></li>
</ul>
<p>Opting for a primarily in-house build offers the most control, but Edsart cautions it can be "resource-intensive," requiring ongoing internal skills development. Furthermore, tracking the actual cost and timeline can be challenging compared to vendor contracts.</p>
<p>Choosing a third-party vendor uses their size, efficiency, and experience from past projects. However, our data reveals that an 'off-the-shelf' solution is rare in pension administration. On average, third-party systems need 52% customization to meet individual pension funds' unique business rules and regulatory requirements.</p>
<p>Interestingly, no single third-party vendor leads the market across the board, likely due to the high degree of unique business rules requiring custom solutions. We find that organizations commonly utilize systems from more than five different vendors. For specific insights into the most popular systems among pension peers, please reach out to your CEM Relationship Manager.</p>[/et_pb_text][et_pb_heading title="Modernization: A Necessity with Varied Paths" _builder_version="4.27.4" _module_preset="default" title_level="h2" title_font_size="24px" custom_margin="||10px||false|false" custom_padding="0px|||||" global_colors_info="{}" theme_builder_area="et_body_layout"][/et_pb_heading][et_pb_text _builder_version="4.27.4" _module_preset="default" custom_margin="||||false|false" global_colors_info="{}" theme_builder_area="et_body_layout"]<p>Our data confirms that modernizing legacy pension systems is no longer optional but necessary. While the optimal path—whether building in-house, partnering with vendors, or a combination—varies, significant customization remains a key factor. Regardless of the approach, pension funds will continue to face challenges related to cost, resources, customization, and the rapid pace of technological change.</p>
<p>At CEM, we believe in the power of shared insights and peer learning. By understanding the trends, costs, challenges, and successes revealed through our comprehensive data, pension funds can make more informed decisions on their modernization journeys.</p>[/et_pb_text][et_pb_code _builder_version="4.27.4" _module_preset="default" global_colors_info="{}" theme_builder_area="et_body_layout"][/et_pb_code][/et_pb_column][/et_pb_row][et_pb_row column_structure="1_4,3_4" _builder_version="4.27.4" _module_preset="default" background_color="#F0F0F0" width="70%" hover_enabled="0" global_colors_info="{}" theme_builder_area="et_body_layout" width_last_edited="on|phone" sticky_enabled="0" width_phone="90%" module_alignment="center" width_tablet="70%"][et_pb_column type="1_4" _builder_version="4.27.4" _module_preset="default" global_colors_info="{}" theme_builder_area="et_body_layout"][et_pb_image src="https://www.cembenchmarking.com/wp-content/uploads/2024/12/Edsart-Heuberger-1.jpg" title_text="Edsart-Heuberger" align="center" _builder_version="4.27.4" _module_preset="default" width="70%" custom_margin="||||false|false" border_radii="on|218px|218px|218px|218px" global_colors_info="{}" theme_builder_area="et_body_layout"][/et_pb_image][/et_pb_column][et_pb_column type="3_4" _builder_version="4.27.4" _module_preset="default" hover_enabled="0" global_colors_info="{}" theme_builder_area="et_body_layout" sticky_enabled="0"][et_pb_heading title="About the Expert" _builder_version="4.27.4" _module_preset="default" custom_margin="||4px||false|false" hover_enabled="0" global_colors_info="{}" theme_builder_area="et_body_layout" title_text_align_last_edited="on|phone" sticky_enabled="0" title_text_align_phone="center"][/et_pb_heading][et_pb_text _builder_version="4.27.4" _module_preset="default" custom_margin="|70px|||false|false" hover_enabled="0" global_colors_info="{}" theme_builder_area="et_body_layout" text_orientation_last_edited="on|phone" sticky_enabled="0" text_orientation_phone="center" custom_margin_last_edited="on|phone" custom_margin_phone="|20px||20px|false|false" custom_margin_tablet="|70px|||false|false"]<p>Edsart Heuberger is Product Manager for Pension Administration Benchmarking Services (PABS) at CEM Benchmarking. He joined CEM in 2008. He has an intimate and quantitative understanding of CEM’s services and databases and continues conducting and supporting administration and investment research. Edsart holds an MSc. in Supply Chain Management from Erasmus University Rotterdam, the Netherlands.</p>[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section][et_pb_section fb_built="1" _builder_version="4.27.4" _module_preset="default" custom_margin="0px||0px||false|false" custom_padding="0px||||false|false" global_colors_info="{}" theme_builder_area="et_body_layout"][et_pb_row _builder_version="4.27.4" _module_preset="default" custom_margin="0px||0px||false|false" custom_padding="||0px||false|false" global_colors_info="{}" theme_builder_area="et_body_layout"][et_pb_column type="4_4" _builder_version="4.27.4" _module_preset="default" global_colors_info="{}" theme_builder_area="et_body_layout"][et_pb_heading title="Share this page" _builder_version="4.27.4" _module_preset="default" title_level="h3" title_font="--et_global_heading_font|300|||||||" title_text_align="center" title_font_size="23px" module_alignment="center" custom_margin="||0px||false|false" custom_padding="||0px||false|false" global_colors_info="{}" theme_builder_area="et_body_layout"][/et_pb_heading][et_pb_icon font_icon="&#xf0c1;||fa||900" icon_color="#ffffff" icon_width="26px" icon_color_tablet="#ffffff" icon_color_phone="#ffffff" icon_color_last_edited="on|phone" icon_width_tablet="26px" icon_width_phone="26px" icon_width_last_edited="on|phone" module_id="copyURL" _builder_version="4.27.4" _module_preset="default" background_color="#001E66" custom_padding="6px|6px|6px|6px|true|true" background_last_edited="on|desktop" custom_css_free_form="selector:hover {||  cursor: pointer;||}" border_radii="on|100px|100px|100px|100px" global_colors_info="{}" background__hover_enabled="on|desktop" background_color__hover="#86c1d8" background_enable_color__hover="on" theme_builder_area="et_body_layout"][/et_pb_icon][/et_pb_column][/et_pb_row][/et_pb_section]