How Pension Systems Are Navigating Covid-19 Outbreak: A Preview

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• On: 04/09/2020 09:04:23
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How Pension Systems Are Navigating Covid-19 Outbreak: A Preview


When confronted with challenges—whether a financial crisis or a natural disaster—public pension systems have always risen to the occasion. Now, in the wake of dramatic fallout from the Covid-19 outbreak, pension systems nationwide are proving themselves to be nimble and adaptable.

 

When confronted with challenges—whether a financial crisis or a natural disaster—public pension systems have always risen to the occasion. Now, in the wake of dramatic fallout from the Covid-19 outbreak, pension systems nationwide are proving themselves to be nimble and adaptable.

From coast to coast, pension systems have dealt with the sudden, urgent need to disperse their workforces, sending employees to work at home while managing risks and ensuring quality. They have also quickly pivoted on behalf of their clients, deploying technology with lightning speed to be able to seamlessly deliver ongoing services to plan members and participants. And pension plans have had to rapidly scale up plans that existed mostly in theory while marching to directions from government leaders that can change from day by day.

Over the coming days, we will be sharing several case studies with you, drawing on the experiences of pension system executives. What follows is a sampling.

For most systems, the first step when confronted with a crisis is to dust off the continuity of operations plan, often referred to as COOP, and quickly apply the framework to a novel and rapidly evolving set of facts.

 “The key is to be adaptable,” says Patricia Reilly, executive director of the Teachers Retirement System of the City of New York. “You could have all the plans in the world but you can't foresee everything you're going to have to deal with.” In her case, one way of adapting was to send people out to procure laptops at Costco and Best Buy when a carefully planned order failed to arrive.

Of course, no disaster plan can anticipate all eventualities. The ability to improvise and think on you feel is an important skill.

“We had contemplated natural disasters and other events that would displace us. But we hadn't focused on a situation where the headquarters is fine but we just can't go there,” said Brian Guthrie, executive director of the Teacher Retirement System of Texas.

For teacher retirement systems in particular, spring break from school marks the beginning of the busy season, which stretches into summer, when most retirement decisions are finalized. Briefings on retirement planning are commonplace, but this spring, previous scheduled seminars and presentations have given way to webinars, video chats and old-school phone calls.

One of the first challenges pension systems faced as the Covid-19 outbreak intensified was triaging who should and shouldn't be at work. Tracy Guerin, director of the Department of Retirement Systems in hard-hit Washington state, said her team started by sending home the most at-risk employees—those over 65 or with underlying health conditions.

“When schools closed, we sent the parents out,” Guerin said. “We cycled through the decisions and responded to the situation we were faced with.” By March 23, 85 percent of her staff was working from home. Three days later, it was 92 percent.

Helping employees stay calm and deliver a positive message to customers is also important, said Doug Anderson, executive director of the Minnesota Public Employees Retirement System. “It has never been our goal to get through customer calls as quickly as possible,” Andersons aid. “We want to answer questions as quickly as possible, but our staff always wants to take care of the member. They have a role to play in calming people and putting them at ease.”

As pension professions and leaders, we are all take pride in knowing that as an industry, we are putting our clients first, communicating clearly and frequently, and making the necessary transitions to a virtual workplace. Our employers are out of the office yet productive; our clients are adapting to the alternative ways we are delivered education, training and other services. We may be in for a long haul, but I have no doubt that public pensions as an industry are up to the challenge.