Cost and quality are the top concerns for pension schemes when it comes to administration, says Hewitt Associates.

In results from the Pension Administration Survey 2009, Hewitt has found that 89 per cent of schemes identified reducing operative costs as their top concern over the next two years. Improving the quality of administration was second with 69 per cent, followed by sustaining activity (62 per cent) and meeting regulatory requirements (40 per cent).

A third of respondents said that in an effort to meet lower cost targets, they are reviewing their outsourcing strategy, with outsourcing seen as an opportunity for cost savings.

"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," explained Ian Terry, pension administration business development manager at Hewitt Associates. "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."

In terms of improving quality, this was a key reason given for the decision by almost three quarters of respondents to outsource. Improving quality will be one of the top three priorities over the next two years for 69 per cent of respondents, while 11 per cent said it was their single largest pressure today.

"As with any service industry, members' expectations of service continue to rise inexorably. As schemes close and the number of active members decreases, there is increased pressure to provide the means to stay in touch through more use of self-service solutions. It is essential not to alienate members through slow, difficult to access, mediocre or poor service," Terry concluded.

- Pensions Age July 2009

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