In a recent survey conducted by Buck Consultants, almost half (47%) of the responding employers currently outsourced at least some portion of their human resources and/or employee benefit plan functions, and another 15% that weren't currently outsourcing were planning to do so in the future.
The top five outsourced human resources or benefits functions were medical claims administration (outsourced by 91% of the firms that reported outsourcing some functions), utilization review (91%), defined contribution plan recordkeeping (90%), vision care (87%), and defined contribution plan investments (82%). The functions outsourced least frequently were vacation/holiday administration (2%), recruitment (8%), human resources information systems (9%), health and welfare plan enrollment (17%), and payroll (18%).
In the health and welfare benefits area, insurance companies and third party administrators were the most frequently selected outsourcers, although benefits consultants administered 58% of the plan enrollment and 49% of the regulatory compliance services for the employers outsourcing these functions.
In the defined contribution plan area, investment companies/mutual funds were the most frequently selected outsourcer for investment management (chosen by 74% of the firms outsourcing this function), investment education (57%), plan loans and withdrawals (49% each), recordkeeping (43%), and administration (41%). Consultants most commonly handled defined contribution plan enrollment (chosen by 42% of the employers outsourcing this function), while consultants, investment companies/mutual funds, and TPAs each handled similar percentages of the outsourcing business for regulatory compliance and qualified domestic relations orders.
Generally, most defined benefit plan outsourcing business went to benefits consultants, but investment companies/mutual funds received most of