Launch of Cost Transparency Initiative will be a step forward for pension schemes

Pension fund trustees can expect new clarity from asset managers on costs and charges as a result of the Cost Transparency Initiative following its launch today (7 November).

The Cost Transparency Initiative will work on implementing, promoting and encouraging the use of new cost transparency templates across the pensions and investment industries. The templates will allow for comparisons to be made across suppliers which will make it easier for trustees to scrutinise and challenge costs.

The group is supported by the PLSA, Investment Association and Local Government Pension Scheme Advisory Board following on from the Institutional Disclosure Working Group’s (IDWG) report to the Financial Conduct Authority earlier in this year.

Mel Duffield has been named the group’s first Chair. Mel has a long and dedicated history within the sector and is currently the Pensions Strategy Executive at the Universities Superannuation Scheme (USS), the hybrid pension scheme for academics and related roles in the UK higher education sector. Before joining USS, Mel was Deputy Director at the Pensions Policy Institute, and the Head of Research and Strategic Policy at PLSA.

Mel Duffield, Chair of the Cost Transparency Initiative, said: “I’m delighted to have been appointed as the inaugural Chair of the Cost Transparency Initiative. It hasn’t always been possible for trustees to compare costs between different services because of a lack of clarity and consistency. By introducing a robust way to define and measure the full cost of investing, we have a golden opportunity to make a real difference across the institutional investment market.

“I’d like to thank all the members of the IDWG for their hard work getting us to this point and I look forward to taking the baton forward with the other Cost Transparency Initiative members. We are looking to have an excellent mix of experience and skills in the new group which will ensure we are well placed to deliver this important piece of work.”

Julian Mund, Chief Executive of the PLSA said: “The PLSA is committed to taking forward the work of the IDWG and is pleased to be playing a key role in support of its successor body. This is a step forward for cost transparency where both schemes and providers benefit from one common, standardised way of assessing and providing costs.”

Chris Cummings, Chief Executive of the Investment Association, said: “We welcome the launch of the Cost Transparency Initiative. Our industry is fully committed to transparency of costs and charges for all investors. We look forward to working closely with the PLSA and Local Government Pension Scheme Advisory Board to build on the progress of the IDWG, to deliver a template which will enable costs and charges to be reported in a clear and comparable manner for institutional investors.”

Cllr Roger Philips, Chair of the Local Government Pension Scheme Advisory Board, said: “The Scheme Advisory Board continues to be fully supportive of investment cost transparency initiatives as demonstrated by the introduction of its own Code of Transparency which now covers some £180bn of scheme assets. The Board is delighted to be part of taking the work forward to the wider institutional space which will enable trustees to make fully informed, value led investment decisions and further trust in the sector by embedding clarity and openness in a previously opaque market.” 

The Cost Transparency Initiative will now look to appoint further members to the group and, over the coming months, run a pilot with a number of schemes and asset managers to test the templates and associated technical and communication materials.

For further information visit the Cost Transparency Initiative webpage.

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