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Retirement Plan Provider Prepares for its Own Future

5 Sep, 2007 By: Bowe Bell + Howell

Retirement Plan Provider Prepares for its Own Future

Throughout its more than 110-year history — first as a community benefit
society, later as a life insurance company, and now as a retirement plan
provider — Security Benefit has been in the business of helping people build
financially secure futures. From annuities to mutual funds to innovative
retirement investment products, the Topeka, Kan., company today manages more
than $15 billion in assets. It serves customers in all 50 states through a
nationwide network of independent broker-dealers and currently has some half a
million contracts in force.

Perhaps best known as the retirement plan provider for the National Education
Association’s 2.7 million members, Security Benefit specializes in IRAs and
403(b) plans for K-12 educational professionals.

Five years ago, though, Security Benefit’s leadership took steps to invest
more heavily in the company’s own future. Chief Executive Officer Kris Robbins
laid out a new vision for the company: one that would be built on a platform of
advanced technology. For Director of Technology Solutions Brent Littleton that
had to begin with an overhaul of Security Benefit’s IT infrastructure. Besides
replacing the company’s outdated mainframe applications, Littleton’s group led
the changeover to a paperless company by implementing document imaging and

Like its competitors, all of Security Benefit’s processes were paper based.
This made the processing, archiving and retrieval of customer documents
time-consuming. On a typical day, Security Benefit would receive by mail
thousands of customer documents, including new applications, payments, request
forms and other correspondence. A group of four support services employees
worked full time opening and sorting the mail, filming it, and transferring the
images to microfiche and rolls of microfilm. The hard copies were then filed.

When customer service representatives needed to access customer documents —
to validate a surrender request, verify information on an application or check
the status of a request form, for example — they had to search the thousands of
microfilm rolls onsite. Finding the relevant documents could take days.

Integrated Imaging and Workflow Speed Payment Processing

To select and install its imaging and workflow system, Security Benefit enlisted
the help of Paragon Systems, a software developer and systems integrator based
in Westborough, Mass. The system originally comprised two high-volume production
scanners, out-of-the-box image capture software and server-based storage.

Now when the mail arrived at Security Benefit each day between 5 a.m. and 6
a.m., support services staff opened, prepared and scanned it. Barcodes provided
detailed information about each document and how it should be indexed. The
images were made available to employees across the company’s network, usually
the same morning the documents were received. The images were searchable by
various identifiers, such as customer Social Security number or contract number.

Now able to locate customer data far more quickly, account representatives
and processors could answer customers’ questions immediately on the phone,
whereas before they had to take a message, track down and view the documents in
microfilm, and then call back the customer.

Security Benefit’s business grew quickly over the next couple years, and its
document volumes increased dramatically. At the same time, document imaging
technology made significant advances. These conditions, together with Security
Benefit’s ongoing mission to gain efficiencies and improve quality using
advanced technology, convinced the company it was time to upgrade.

Working with Paragon Systems, Littleton’s group replaced its scanners with two
BÖWE BELL + HOWELL Copiscan 8125 Spectrum high-speed scanners outfitted with
Kofax’s VirtualReScan (VRS) image enhancement software. Ascent Capture, also
from Kofax, was selected to replace the old capture software. Security Benefit
quickly found that the benefits of its new and enhanced document management
system went well beyond speedier access to customer information.

As a retirement plan provider, Security Benefit faces monetary penalties for
funds received from customers but not invested on the same day they are
delivered. For this reason, payments such as annuities investments are set apart
and pushed to the front of the processing queue. Starting soon after the mail
arrives, support services now completes the entire day’s scanning comfortably by
10 a.m. It helps that each Spectrum scanner, with a daily duty cycle of 60,000
pages, can scan up to 125 pages per minute. “We kept one of the old scanners as
a backup in case one of the new ones went down,” said Littleton, “but that has
never happened.”

What is more, the barcodes for these documents contain the payment amounts.
If this amount matches the amount Security Benefit billed the customer, the
system automatically saves the digital image and categorizes the transaction as
completed. The payment transaction flows automatically to the administrative
system where the funds are applied. As Littleton points out, “This is just one
example of how we’ve achieved Straight Through Processing with our new
technology framework.”

At the same time, Security Benefit gradually began to roll out imaging to its
other business departments. Groups such as finance, human resources and
marketing had run entirely paper-based operations and accumulated vast
quantities of paper over many years.

But with mail scanning completed by 10 a.m. each day, the imaging system and
staff were now available to convert these documents into digital images.

‘Load It and Leave It’

Scanner operators at Security Benefit found the new imaging system much easier
to use. With the previous scanners, operators had to hand feed the documents and
closely monitor the scanners to make sure no double-feeds occurred. With the
Spectrum scanners and Ascent Capture, however, support services personnel can
“load it and leave it,” as Littleton says, making them available to work on
other projects. The system’s consistency relies in part on the Spectrum
scanner’s very reliable ultrasonic multi-feed detection, which prevents multiple
documents from feeding through the scanner at the same time.

The paper processed at Security Benefit comes in all sizes, shapes and
thicknesses. Documents range from legal, letter or coupon size, to checks and
handwritten notes on irregularly shaped pieces of paper. Fortunately, the
scanners and image enhancement software automatically adjust document skew,
brightness, contrast and image quality. This ensures the images customer service
personnel reference are clear and legible, regardless of the quality of the
original documents.

By digitizing its paper-based processes, Security Benefit has freed up space
it once needed for microfilm and hard copy files. In fact, when Security Benefit
relocated to a new facility recently, there was no need to allocate space for
the filing cabinets that once housed these records. After documents are scanned,
hard copies are stored for only 30 days and then destroyed. Furthermore, by
securely storing digital images, Security Benefit complies with SEC, state and
other legal requirements for document retention.

All told, Security Benefit performs about 300,000 scans a month, at least 10
times more than it did five years ago. As a result of its new technology
infrastructure, including document imaging and workflow, Security Benefit has
reduced overall IT expenses by 40 percent and processing costs in its service
department by 35 percent. The company also dramatically improved its customer
service, cutting response time from days to minutes. And in the same time period
that the company achieved these drastic savings, it experienced a 50 percent
increase in sales volume.

Crossing the Threshold into Distributed Scanning

When Security Benefit invested in an insurance broker-dealer’s office in
California last year, Littleton’s team was asked to look for ways to leverage
the technology advancements at Security Benefit at the broker-dealer. The IT
group faced a new challenge: how to integrate the broker-dealer’s document
management procedures with its own. After consulting Paragon Systems, Security
Benefit decided to make its first foray into distributed scanning — using
entry-level scanners at a remote location to capture document images and sending
them on to a larger central location.

In need of an imaging solution that was easy to install, use and maintain,
Security Benefit decided on the Böwe Bell + Howell Sidekick 1400. A departmental
scanning solution, Sidekick came with all the components needed to set up and
run a desktop imaging system. In addition to Kofax’s Capio desktop document
capture application, the scanner came equipped with VRS and shared a common user
interface with Security Benefit’s Spectrum scanners. These features made it far
easier to integrate the California office with the Topeka operations.

The remote office is using its desktop imaging solution to convert some 2
million stored documents into digital images. These include documents
broker-dealers are required to retain, such as customer applications for
annuities and life insurance, contracts with licensed salesmen who represent the
broker-dealer and documents for verifying sales suitability.

Technology Solution Presents New Revenue Opportunity

By last year, Security Benefit had created and refined a cost-effective
technologically advanced IT infrastructure — including, with the assistance of
Paragon Systems, its customized imaging and workflow. Company leaders realized
that to capitalize fully on the IT investment, Security Benefit could make its
innovative technology platform and expertise available to others in its

So in August 2005 Security Benefit launched se2, a wholly owned subsidiary, to
provide outsourced business processing services to companies that specialize in
life insurance and annuity products. Companies that select se2 route their mail
directly to its service facility. The support services staff open, prep and scan
the incoming documents and the automated workflow ensures work is loaded into
company specific work queues.

Business generated by se2 represents more than 300,000 customer contracts.
But with its imaging and workflow system in place, the company has been able to
handle the increased document volume without increasing IT staff or ongoing
technology expenses. Littleton credits the company’s state-of-the-art IT
platform, including the high duty cycle of the Spectrum 8125 scanners.

By implementing imaging and workflow, Security Benefit managed swelling
document volumes and improved customer service during a period of extreme sales
growth without adding staff. And with a bit of ingenuity, the company even
parlayed its technology investment into a new revenue stream.

All of which convinces Littleton that Security Benefit’s future is as secure
as those of the customers it serves.

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