Dick Kamp: Pension administrators in a changing sector

October 21, 2025

_{This column was originally written in Dutch. This is an English translation.}

By Dick Kamp, Director of Pensions, Investment & Risk at Milliman Pensions

The pension sector is currently undergoing a fundamental transformation. As pension funds evolve from purely financial to socio-financial institutions, the role of pension administrators is also at a turning point.

In a world where participants expect greater empowerment and pension funds are looking for ways to renew and actively promote their value proposition, the traditional focus on efficient administrative processing and accurate communication is no longer sufficient. Pension administrators are expected to take a proactive approach.

From reactive to proactive

Pension administrators have long functioned as executors of what others have decided. The social partners negotiated, the pension funds determined the policy, and the administrators implemented it. In the new reality, administrators are expected to proactively contribute ideas about the further development of the implementation of the pension product. This requires a fundamental reorientation of their role and their added value.

The consolidation trend in the sector – from more than 1,000 pension funds at the beginning of the 21st century to around 140 in 2024 and even fewer in 2040 – means that pension administrators will have to deal with larger and relatively more complex clients who have higher and different expectations. These funds have greater financial and intellectual clout and expect their administrators to grow in strategic thinking.

Developing new competencies

To remain relevant, pension administrators must develop new competencies:

1. Strategic partnership: from administrator to administrative partner who contributes ideas about the future of the pension product
2. Participant focus: in-depth insight into the changing needs and expectations of different generations of participants
3. Innovation capacity: the ability to translate new technologies and insights into concrete improvements in service provision
4. Data-driven working: unlocking valuable insights from the wealth of data that administrators manage
5. Flexibility: the ability to accommodate more personal choices and customisation in pension schemes

The participant at the centre

The shift to what I call “participant-inclusive pensions” requires a different approach to administration and communication. Whereas the emphasis used to be on accuracy and completeness, it is now increasingly about comprehensibility, relevance and engagement. Pension administrators must be able to translate complex pension matters into meaningful communication that is relevant to the lives of different participant groups and different stages of life.

This also means that administration partners must be able to deal with more complex administrations, freedom of choice and flexibility. The possible development towards temporary alternative uses of pension assets – such as sabbaticals, retraining or home financing – will place new demands on administrative systems and processes.

Technology as an enabler

The technological revolution offers pension administration partners opportunities to transform their services. By making smart use of data analysis, artificial intelligence and user-friendly interfaces, they can:

• Offer personalised, tailor-made communication
• Provide insight into personal pension situations and options for action
• Calculate scenarios that match the life stage and needs of participants
• Add something else about how tech can help with complex administrations
• Work more efficiently, creating more space for value-adding activities

From administrator to innovation partner

In the new reality, pension administration partners are challenged to participate in innovation teams in which they experiment with new propositions together with pension funds, participants, employers and experts. This requires a cultural shift: from risk-averse to actively entrepreneurial, from reactive to proactive, from implementing to co-creating.

Administration partners who make this transition successfully position themselves as indispensable partners in the pension sector ecosystem. They bring not only operational excellence, but also strategic insight, innovative capacity and participant-oriented solutions.

The choice is now yours

The pension sector of 2040 is being shaped today. Pension administrators, take up the gauntlet and transform from executors to indispensable strategic partners! Invest now in new competencies, dare to experiment and show proactive leadership in innovation.

Pension fund directors, take a different look at your administrators and discover the strategic value they can add! Challenge them to think along with you about the future of your fund and actively involve them in shaping new propositions for your participants. The funds that enter into this collaboration now – in which administrators and directors push the boundaries together – will be tomorrow's winners. The transition to the new pension system is just the starting shot. The real race for relevance and added value begins now. Who's in?

This is the forty-fourth column in a series on risk management. The series aims to encourage readers to consider risk management as an integral part of running a pension fund

More columns by Dick Kamp