Trustees regularly put their administration up for tender and a successful bid often results in a fund migration. This may be between administrators or just platforms within an administrator. Each migration is unique and presents its own set of challenges and disruptions, however all migrations have a number of common tasks that if kept in mind can make the process easier.  

When you start a migration do you have all the information you need to get a clear picture of the effort involved? 

There are several artefacts that are invaluable in the kick-off phase of any superannuation fund migration. Ideally, you would have all of these for your migration but that isn't always possible, so getting your hands on as many of them as you can is a good starting point. 

• The trust deeds 

  The source of truth. This document provides detail about the fund and its products. However, be careful as it is usually a high-level document and will not contain specific details needed to resolve conflicts in understanding.  

• Insurance policies 

Another source of truth focused on the insurance arrangements. Again, this is a fairly high-level document with details resolved in the business rules. 

• Product Disclosure Statements (PDS) 

These form the basic understanding of the fund that members and employers have and are an agreement with the fund on the products available. For migrations, they are a quick reference of where to find fees, insurance arrangements, investment options and other rules about the fund neatly laid out and ready to digest. 

• Websites 

The fund's website is a great source of information. It can quickly provide contact details, ABNS, SFNs, SPINs and other identifiers. The website should also provide various forms and PDSs used by the fund. 

If the fund is willing, it is a good idea to get access to member and employer portals, or at least screenshots if hosting them will be part of the migration. 

• The fund business rules  

Ideally the fund will have a pre-compiled document listing their business rules and describing how they operate. This document is gold for understanding the fund, even if it is not perfect. It expands on the information found in the other documents, providing clarifications on the most obscure rules. It is also one of the first places I look for gaps. 

• Data 

This is a tricky one for kick-offs. Sometimes there is access to a portion of the data at this stage, sometimes there is access to nothing. If data can be accessed at the start an assessment of the data quality can be made and can indicate the level of effort required to clean the data before the migration. It is vital not to take the least line of resistance and move unclean data to the new platform. Cleaning data effectively and in and good time is achievable using a data quality tool like Investigate. 

It is absolutely not worth migrating poor data onto a wonderful new platform when it is riddled with error. This will only create more problems down the path which will be expensive and time consuming to fix.  

• Letters, reports and forms 

At a minimum obtain a list of all the letters and reports that the fund uses. It is even better to get samples if possible. These documents need to be examined to find which ones are automated, manual and which are variations. 

By the end of the kick-off you should have the following, not necessarily complete, but in a usable state: 

• A document, or documents, outlining your understanding of the fund. These do not have to be formal as long as they help with understanding the big picture. 

• A list of identified or suspected gaps in the funds requirements and the target platform's functionality. 

• An agreed questions and answers process with the fund along with a register. 

• Identification of key external and internal stakeholders and agreements in place on communication channels. 

No two funds are the same. The number of times I have heard that it is a vanilla fund and there should be no gaps corresponds exactly with the number of times I have found myself saying, “I've found gaps, this definitely isn't vanilla.” Gap analysis is a big part of any migration and usually raises the most challenges. 

Get the technical gurus in early. They will be able to help swiftly pinpoint gaps as you sift through the information from the kick-off and suggest possible solutions.   

Some areas where gaps are frequently found include obscure insurance arrangements and grandfathered members who have products that aren't mentioned in the public literature. The fund's business rules will reveal the most gaps if it is available, otherwise the PDSs will typically contain hidden details that are easily overlooked. 

When a gap is found, investigate the impact. Things to look for include the number of members affected, the likely frequency of occurrence and the complexity of automation. When that is done you can then choose a course of action: 

• Build the gap. If budget and time permit you can have the functionality added to the platform. The advantage of this is you now have added functionality available to other products on the platform.  

• Determine a workaround. Where volumes are low, or development costs are prohibitive this is your best bet. 

• Negotiate a compromise with the fund. While the first two are the preferred options, in most cases it is not always possible to implement either of them without a change in their business rules. 

How far back should configuration go? From the start of the funds founding? Five years? Only the current year? 

Configuration of a fund is a complex process and every product offered increases that complexity. Add to that the changes that have occurred to each product every year and it rapidly becomes a costly and overwhelming exercise. It is impractical to configure the entire history of every product the fund has offered and provides little benefit so limiting the amount of configuration effort is crucial to a successful migration. 

As a minimum, a detailed configuration of the fund covering the current and previous financial years is needed to handle any rollbacks or queries that may arise. Beyond that, a less detailed configuration can be used to hold the data from the fund all the way back to the fund start date. More detail for previous years can be added prior to migration if needed. 

A migration is an ideal time for a data quality check. This is the moment when it will be cheapest to fix any errors and have a baseline going forward which you can trust to be accurate. Errors that come in as part of a migration rapidly increase in cost to correct as time goes by, especially after end-of-month and end of year activities have kicked-off. 

Another advantage of conducting data quality exercises early in a migration is that it can reduce your migration effort. A lot of the configuration decisions and directions taken during the analysis phase will use clues from the data. If that data is inaccurate then those decisions can head down a rabbit hole fast. The result is a cumbersome configuration and multiple workarounds that are not necessary with clean data. 

To read more on the impact of data quality on super funds and migrations see this link.

Remember that the fund is still operational right up to the moment of migration. It is a competitive world out there and the fund will need to make changes to retain and attract new members. The fund may need to add or change products at any time during the migration, so be ready for changes in products, new gaps shortly before migration date and some surprises. The longer a migration takes the higher the chance the fund will need to introduce changes.  

Have a plan on what level of change is acceptable prior to migration and what would need to be implemented post-migration. This may mean that new features need to use a temporary arrangement until the migration date. 

 A successful migration will depend on getting the right information at kick-off, expecting gaps and knowing where to look for them and limiting the history you configure to what is needed going forward. And remember to take advantage of the opportunity to clean the data as this can add savings both during the migration and long after. 

Regards

Yunus

Yunus Mohammed - Senior Consultant

If your organisation is looking at a migration, QMV has extensive experience so please feel welcome to contact our office p +61 3 9620 0707 or submit an online form. 

QMV provides independent advisory, consulting and technology to superannuation, wealth management, banking and insurance organisations.

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