In its annual pension scheme administration survey, the firm found that DC plans are now offered by eight out of 10 employers, with the average contribution paid by the employer being 7% and the employee contribution averaging 4%.
However, the shift to DC has been accompanied by rocketing costs, with the costs of managing schemes higher than previous years.
Seventy-one per cent of those surveyed said the costs of managing the scheme has grown at a faster rate than any other business overhead.
High costs were associated with changes in long-term assumptions, such as mortality rates and investment growth.
Commenting on trends for defined benefit, Capita said more companies were making a one-off payment (38%), increasing regular contributions (16%) and 9% were closing their scheme to new entrants.
Mike Addenbrooke, managing director of Capita Hartshead, said: “Increases in administration costs returned to more comfortable levels, and for all but the smallest schemes, third- party administration continues to provide substantial cost savings.”
KF
