Fifty per cent of trustees admit that they would prefer certainty when it comes to administration costs.

Capita Hartshead's sixteenth Annual Pensions Administration Survey showed that while 31 per cent of third-party administration clients work on a fixed-price contract, 50 per cent said this would be their preferred option. Per capita cost plus a management fee has attracted 27 per cent of schemes so far, and 42 per cent said this would be their preference.

"We have always worked with our clients to make sure that they have a clear fee structure that suits their circumstances," commented Debbie White, sales and marketing director at Capita Hartshead. "For many trustees it is increasingly important that they understand, and can plan for, their administration costs, with no fear of nasty surprises."

Administration costs were found to have increased over the past 12 months, although the pace of this increase has relaxed for most schemes. In-house administration for larger schemes remains more expensive than third-party administration, at £46 per member compared to £39 per member.

When it comes to choosing a third-party administration provider, organisation experience, specialist technical support and a robust governance framework emerged as the three most important factors for consideration, followed by reputation and cost.

The survey covers UK pension schemes with assets in excess of £220bn, and over 6.3 million members in 288 schemes.

- Pensions Age May 2009

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