The client is one of the UK's leading and progressive financial services groups, with more than 2.6 million individual customers. The client's core businesses are Life and Pensions and Asset Management operating with around 5000 people throughout UK and a network of about 30 regional offices. The Life and Pensions business operates primarily in the UK and in selected international markets. It is one of the top ten life and pensions providers in the UK, marketing a comprehensive range of pension, protection, annuity and savings products to both corporate and individual clients.

The client got demutualised on April 9th 2001 and as a result of this, the trustees for Occupational Pension Schemes will be unable to pass shares to members as confirmed by Inland Revenue. In addition, the client's policies do not permit non-self administered scheme trustees to hold shares, so a separate arrangement must be implemented to compensate those Schemes and/or Members.

To meet actuarial and legal issues, it was decided to create a Demutualisation Terminal Bonus (DTB). The variable allocation of shares for the scheme or member will then be converted into cash on the date of Demutualisation, and this cash fund will form the base units of their DTB. There will then be a unit-linked price applicable to these units, and a terminal bonus will be applicable to the DTB at claim time. The Trustees/members will be able to realise their DTB value as a claim i.e. death, maturity, surrender or partial surrender.

This change would impact some 20,000 schemes with some 90,000 scheme and members (and over 100,000 computer policy records) covering both conventional and unit linked with-profit pension policies being administered through various mainframe based systems, which have evolved with time.

A study was conducted for three weeks by business analysts at Wipro to determine the exact scope of changes as part of the project. After a series of meetings and workshops in determining and prioritising requirements, Wipro came up with a staged plan for execution of the project. The various stages were:

Stage A: Providing alerts on all relevant mainframe screens so that manual handling of DTB can start immediately.
Stage B: A separate module for projection of the DTB fund separate from the main fund was to be developed. Also due to Pensions Act 1995, it was required for the DTB fund to be used and projected separately for funds before and after April 1997. A split of the DTB fund across policies was to be created from existing policy systems and loaded onto the DTB database.
Stage C: Inclusion of DTB in projections and quotations as well as all benefit statements & schedules and reports across all systems
Stage D: Inclusion of DTB in actual-offs (Retirements, Surrenders, Death Claims) for various systems
Stage E: Inclusion of DTB for automation of accounting transactions as a result of claims
Stage F: Inclusion of DTB in other enquiry screens for telephone enquiry etc.

The business study prioritised the various systems and contracts to be incorporated as part of the scope. Also actuarial valuation and projection models for DTB were developed and treatment of DTB for various offs and accounting processes were determined. Also a detailed project plan and estimation was done to plan out the project deliverables and user acceptance testing.

As a result of DTB, organisational procedures were impacted and the business analysts helped produce procedure manuals for processing of DTB by customer services teams.

Wipro undertook the execution of project through an offshore model. While the technical design of the system was conducted by an onsite team of technical specialists, execution and testing of the various changes were conducted by a technical team based in India.

Currently, Stage A of the project is complete and Stage B is under execution.

Pensions Administration, Customer Services teams, Actuarial, Accounting

Languages: PL/1, Assembler, IMS DC, JCL
Databases: DB2, IMS