1 - Resistance to outsourcing falls away
A third of in-house administered schemes in this Survey have never considered using third-party administration (see Table 25). However, of these, two-thirds (up 35 points on a year ago) now say they are likely to consider using third-party administration in the future.
Table 25: In-house administered schemes - Have you ever considered using a third-party administrator?
If 'yes', when was this last considered?
If 'no', are you likely to consider using third-party administrators in the future?
This is a very sizeable turnaround over the last 12 months (and for many years prior), in all probability reflecting the economic and financial pressures on both sponsors and trustees over the last two years. In relative terms, more defined contribution schemes that are presently run in-house are warming to the outsourcing option.
Of those schemes who have already considered using a third-party administrator, a fifth did so in the last year.
2 - System providers: a consolidated, but fluid market
The top administration system providers to schemes have remained much the same over the years, although there has been a narrowing in the number of system providers over the years since the Survey series began, not least because of mergers and acquisitions (see Table 26).
Table 26: In-house administered schemes - Top administration system providers
When did you last review your software?
Did you change provider?
Are you planning a review in the near future?
Over half of schemes have reviewed their system provider in the last three years, with a surprising 30 per cent saying they changed provider on review. A third of these schemes say they are considering a review of their provider in the near future, considerably up on the situation a year ago, suggesting the market will remain very fluid in the year ahead.
The run up to 2012 and auto-enrolment may be one factor driving these changes, as may be the ongoing shift in pension arrangements towards a greater emphasis on defined contribution arrangements. Aspirations to reduce costs and/ or to extend current functionality may also be driving provider changes.
Two-thirds of schemes have software that provides automated calculations and quotations, electronic document management and integrated workflow/case management (see Table 27). Where this is not yet offered, the most sought after developments in the year ahead are 'member access on-line', 'web browser access', 'integrated finance/cashbook functions', 'integrated telephony' and 'straight through investment processing'.
Table 27: In-house administered schemes - What does your software presently provide and what would you like to develop as a priority in the nest 12 months?
