Reducing operating costs is the key priority for 89 per cent of the 143 UK schemes polled by Hewitt when asked to name their key focus both now and in the next two years. The survey also identified three other key targets for schemes – improving the quality of administration, important for 69 per cent, sustaining activity, key for 62 per cent and meeting regulatory requirements, relevant for 40 per cent.
Hewitt says the results demonstrate that while economic pressures are forcing schemes to consider means of reducing costs, there is a determination that the recession should not be to the detriment of maintaining and increasing the quality of pension administration. It says that as a result, many schemes are reconsidering how they approach pension administration overall.
In an effort to meet lower cost targets, 33 per cent are currently reviewing their outsourcing strategy.
Ian Terry, pension administration business development manager, at Hewitt Associates, says: “Shrinking budgets coupled with an uncertain economic outlook are forcing a wholesale revaluation of all service agreements – companies need reassurance that they are being offered value for money. Pension administration is definitely not exempt from the effects of recession and many schemes are treating it as an opportunity to reset their priorities and push for more intelligent solutions and a better deal.”