UK pensions sign up to cost disclosure initiative

Major UK pensions sign up to cost disclosure initiative

Ten of the UK’s biggest pension schemes have written a joint letter publicly announcing their commitment to the Cost Transparency Initiative.

Launched in November 2018, the Initiative encourages asset managers to report their costs and charges in a standardised format to help institutional investors access and assess critical information on costs and decide whether investments represent value for money. 

The Initiative, which provides a set of templates and tools to standardise cost data, has seen its framework gather support and interest from the pension and investment industries in recent months.

The 10 big name pension schemes lending their support include the Universities Superannuation Scheme, DHL Pensions Investment Fund, Kingfisher Pension Scheme, National Grid UK Pension Scheme, Nest, RBS Group Pension Fund, Royal Mail Pension Plan, Smart Pension, Superannuation Arrangements of the Universities of London (SAUL), and the People’s Pension.

In its joint letter, the schemes – which have a combined 19 million members and more than £150bn in assets under management – have set out their intent to use the new standards to push greater transparency around costs.

“We represent some of the largest pension schemes in the UK and we believe that greater cost transparency will help everyone achieve a better income in retirement,” the letter states. “We support the approach taken by the Cost Transparency Initiative to create a new industry standard for institutional investment cost data.”

The pension schemes said that they would support further development of guidance for asset managers on how to provide cost information to their clients, and for investors on how to make best use of this new industry standard.

“We intend to use the tools and templates as far as is appropriate to the specific circumstances of our scheme,” they said in the joint statement.

The Cost Transparency Initiative, which carries forward the work of the previous Institutional Disclosure Working Group (IDWG), said it expects asset managers to report against December 2019 and April 2020 year-ends using its new tools and framework.

“I’m delighted that so many pension schemes have engaged and are adopting the Standards already and that ten of the largest DB and DC schemes in the UK have made this public commitment of support,” Mel Duffield, chair of the Cost Transparency Initiative, said.

“We will work across the industry to encourage adoption and will be working with schemes and providers to showcase just how important these Standards can be for them and indeed for the millions of savers who will ultimately see the benefits of greater cost transparency,” Duffield added.

The Cost Transparency Initiative is supported by the Pensions and Lifetime Savings Association (PLSA) and the Local Government Pension Scheme Advisory Board and was recommended as part of the IDWG’s report to the FCA last year.

Last Updated: 8 September 2019
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