In this article, Pat Sharman, UK Managing Director of KAS BANK, talks about the impact of cost transparency on costs. We also look at how pension fund trustees are utilising cost transparency to promote discussion and help improve pension scheme governance.
25 Mar 2019
For many years, the true cost of running a UK pension fund was at best opaque. Against this backdrop, even highly experienced trustees were often trying to work out how much they were paying and for what. The introduction of cost transparency is beginning to change all that, providing more clarity on the total cost of ownership to help pension schemes determine true costs. When KAS BANK conducted a survey of the Dutch defined benefit market in 2018, a big surprise was the fall in the average cost per pension scheme, which was partly due to transparency.
Improving governance is also an outcome of cost transparency. The article outlines the experiences of a pension fund trustee - ‘The first challenge was to identify all the costs, obtain the required information from all the associated parties and then analyse them to understand if they represented good value for members – it provided and analyse to promote discussion amongst the Trustee Board”.