How robotic process automation is boosting occupational pension processes

Picture of Peter Steinhoff

Peter Steinhoff

August 24, 2018

The world of work is increasingly characterized by the increasing digitalization influenced or changed. In this context, the automation of processes by robots (robotic process automation, or RPA for short) also plays an important role. This aspect is particularly important in terms of saving time and increasing efficiency in an increasingly fast-paced working world. But the shortage of skilled workers is also an issue here. If software robots relieve employees and specialists of routine processes, these resources can be used for other activities. RPA can also bring advantages for routine processes in the context of company pension schemes. As the analysis shows using an example, this can save both time and costs in retirement processes.

What is Robotic Process Automation (RPA)?

RPA is the automation of processes using software robots. The robots can work with the help of the existing IT infrastructure. RPA can free employees from routine processes and thus significantly reduce their workload. The advantages of RPA are primarily seen in time and cost savings as well as quality improvements.

Why is RPA suitable for retirement processes?

The retirement of surviving dependants is a frequent occurrence in the company examined for this analysis, as there are around 20 deaths per month in the pension fund. However, the annuitization process currently consists of many manual activities. For example, many details have to be maintained manually when entering the surviving dependants in SAP. Another aspect is the system breaks, for example when communicating via email and recording this information in the systems. Due to the many manual activities and system breaks, this process takes a lot of time. However, the process is time-critical and must be recorded in the systems by the next monthly statement. Due to the many manual entries, there is also a certain susceptibility to errors.

As the annuities follow a defined process and the rules for granting pensions are laid down in the General Insurance Conditions, the process follows precise rules. The process can also be regarded as structured: There are precise specifications as to when something should be done and how, and the data is available in a structured form. This shows that the annuitization process for surviving dependants meets the criteria for the use of automation by RPA and, if implemented, can be expected to result in major efficiency gains.

How does the implementation of the retirement process work with RPA?

With the help of RPA software, significantly fewer manual steps would be required in the retirement process. First, the automation starts, the program monitors the shared mailbox and when a corresponding email with a death notification arrives, the email is read or the attachment is opened. The system can take the information required to stop the pension payment for the deceased, such as the personnel number or date of death, from the death notification.

An entitlement check must then be carried out with regard to the survivor's pension. This can also largely be done using the data from the death notification or death certificate, as the surviving dependants must be listed here. Under certain circumstances, the employee may be asked questions in more complex cases. On the one hand, there may be questions or ambiguities when clarifying the claim, and on the other hand, when actually entering the surviving dependants in the system. However, most infotypes, such as the organizational assignment, address, etc., can be transferred from the system entry for the deceased.

Once the surviving dependants have been entered into the system, a print job is automatically issued for the necessary letters. This is where the automation ends. However, the process of checking by a second clerk becomes superfluous, as errors caused by humans, such as mistyping, are eliminated by RPA.

The process of signing by the Management Board cannot yet be automated, as the pension fund stipulates that retirement letters must be signed personally by the Management Board. However, most manual activities could be automated using RPA.

Cost-benefit analysis of RPA

If we compare the costs and benefits of robotic process automation in this case study, the main cost benefits are the cost of implementation and the effort required for configuration. The main benefits cited are quality improvement, time savings and cost savings. In most publications, there is a tendency for the benefits of RPA to outweigh the costs. Opinions on how much time and money RPA actually saves depend very much on the process in question. Capgemini (2016) considers time savings of around 70 percent to be realistic for certain processes, while KPMG lists potential cost savings of around 75 percent for other processes.

The specific costs for RPA software depend on aspects such as the scope of implementation, the complexity of the processes and the degree of automation. In some cases, a Amortization of implementation costs in less than twelve months gone out.

In the example examined, the process described requires around 240 working hours per year. This figure is made up as follows: There are approximately 20 deaths per month in the pension fund, and it takes around one hour to process a case. This results in 20 hours per month and therefore 240 hours per year. Assuming a time saving of 75 percent through RPA, 180 hours could be saved per year.

Conclusion on RPA in the retirement process

From the perspective of a pension fund, RPA is particularly suitable for the annuitization process of surviving dependants, as this process is time-consuming, time-critical and error-prone and involves many manual activities. On the one hand, this can save a considerable amount of time, while on the other hand, the susceptibility to errors is reduced to a minimum.

Further information on robotic process automation and corresponding application areas can be found online at Institute for Robotic Process Automation & Artificial Intelligence.

This article was written by Professor Dr. Peter Steinhoff in collaboration with Kathrin Schwarz. Ms. Schwarz has a bachelor's degree in business administration and works as a clerk at a pension fund.

(Cover image: © Andrey Popov |

About the author

Picture of Peter Steinhoff

Peter Steinhoff

Prof. Dr. Peter Steinhoff is Managing Partner of TCI Transformation Consulting International GmbH and an expert in business transformation for CFOs and CIOs. He is also a professor of business administration and an active speaker and author.

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