25 July 2008
Research from Aon Consulting has found that cost is not the the
most important factor in the decision to outsource pensions
administration as previously thought by many. It is actually a
preference to focus on core company business that is the driving
factor.
It was found that 66% of employers who ran Final Salary schemes
outsourced their administration. When it came to money purchase
schemes 85% of employers took the option to outsource. Stuart
Heatley at Aon said: "The results suggest that third-party
administration continues to be an attractive path for many schemes.
It is clear that financial benefits can be gained through
appointing a third-party administrator."
Heatly added: "Outsourcing pensions' arrangements to a TPA
allows a business to focus on it core activity by handing over the
reigns to a business whose core activity is pensions administration
and whose specialist focus is purely on minimising risk and
maximising efficiency in service delivery."
