Irish Association of Pension Funds (IAPF) has launched the Cost Transparency Standard (CTS) to enable trustees to better understand the investment costs they pay and to benchmark these costs against their peers.
The CTS builds on the requirement in the Pensions Benefit Statement to provide a breakdown of the costs deducted by a pension scheme.
The Irish Pensions Authority has welcomed the launch and said that pension scheme trustees have a responsibility for achieving good outcomes for their members and beneficiaries.
It pointed out that scheme costs have an important bearing on these outcomes, and therefore trustees should know the costs that their pension schemes are incurring and be able to justify the value received for these costs.
It added that costs and value for money are an important part of the Authority’s engagement with pension scheme trustees and the information provided by CTS will be a useful input into that dialogue.
For schemes that are not participating in the CTS process, the authority said it expects them to have equivalent data, from whatever source.
It said it favoured a “voluntary approach” to cost transparency, benchmarking and disclosure, and through its supervisory powers it said it would closely monitor the success of the voluntary regime.
However, it stressed that if cost disclosure and comparability were not adequate in the long term, it would seek legislative change.
IAPF is working with ClearGlass to facilitate the introduction and implementation of CTS. ClearGlass has produced the prescribed CTS Templates and will also process the data and present the results to the schemes.
It said that pension schemes are free to use other means or providers to analyse their costs.
As part of the CTS information programme, IAPF has also arranged for a series of live CTS information programmes to be available for asset owners and their advisors.
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