Smaller pension schemes are paying more in actuarial costs per member than larger schemes with more members, according to KGC.

The KGC fifth actuarial fee survey revealed that the trend for smaller schemes to have a higher unit cost per member has continued. The report found smaller schemes are paying a “substantially higher” UCM than larger schemes.

For schemes with 10,000 members the average UCM was under £20 whereas for schemes with only 200 members, the average cost was almost £60.

In addition, the report found that across all scheme sizes the average annual actuarial fee decreased in 2014, following a four year upward trend in costs.

For schemes with 10,000 members the average was just over £30,000 and for schemes with 2,000 members the average was just under £20,000 for 2014.

KGC research analyst and report author Hayley Mudge said is comes as no surprise that de-risking remains top of the agenda for most schemes.

“Actuarial firms continue to look for innovative ways of assisting them. Firms also expect additional work coming from advising schemes on the budget outcomes and new DC freedoms.”

“With regards to the issue of costs for smaller schemes, participants are looking to streamline costs through improving their use of technology and providing a much standardised range of services,” she added.

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