kas-propositionsheet-cost transparency-v2
TRANSCRIPT
How much are you really paying for your scheme? Is your Trustee Board achieving “Value for money”? What factors are affecting the returns of your scheme’s investments? What are the “Hidden Costs” that you are not aware of? These are all questions Trustees increasingly have to consider as they look to the sustainability and performance of DB Pension Schemes. Learn how KAS BANK can help answer them.
The Transparency Challenge
Amidst growing demand for greater transparency across the UK Financial Services sector, UK pensions and their intricacies have come under review, with one area of particular focus being transparency of costs. ‘Total Cost of Ownership’ is now recognised as an important element for schemes about which little is often under-stood. This is having a fundamental effect on the long-term ability of pension schemes to meet their liabilities. Authorities, regulators and consumers are all demanding increased disclosure around costs to give a true and accurate view of long-term performance of pension savings. We believe trustee boards should be able to demand the same.
Providing useful industry-wide analysis requires consist-ent and comparable data yet currently each scheme utilises a different methodology for reporting the cost and fees associated with its operations. Efforts have been made to better understand the costs incurred throughout a scheme’s value chain, but no party yet offers this data or provides analysis back to the industry in the UK. Typically, this is because the party either lacks the expertise/capabilities to perform the complete analysis or the party is conflicted in some way by other services it offers.
The benefits of understanding costs
Greater transparency of costs can help you:• Ensure you are receiving value relative to
performance• Open up avenues for better negotiation with
providers• Identify areas where there may be opportunity for
greater efficiency• Keep ahead of potential increases in regulation
Transparency of your costs plays a vital role in your governance chain, helping your scheme to meet its liabilities.
Cost Transparency for Pension Funds
Develop
Pat Sharman
Director of Pensions UK
T: +44 (0)20 7153 3660
Matthijs Verweij
Business Development Manager Pensions UK
T: +44 (0)20 7153 3670
How can KAS BANK help?As an independent organisation, KAS BANK avoids any conflicts of interests and so is both willing and able to provide this service. Moreover, as a Custodian & Fund Accountant, we are the industry leaders in understand-ing the nature of the data and where the costs occur along the value chain.
Introducing transparency on a wide scale will enable scheme trustees to have a greater understanding of the true total costs which are being incurred and so allow them to conduct fully informed discussions with their scheme service providers and advisers.
Our Cost Transparency PlatformOur platform can identify and capture an advanced spectrum of pension scheme costs, delivering compre-hensive look-through capability. We can combine UK cost data with valuable Dutch administration data (often
considered to be the industry standard for cost transpar-ency) to create a broad universe of comparable cost categories. This provides a transparent view of your scheme and establishes how your costs compare to your peers.
Individual schemes receive a report presenting the collected information in a clear manner showing the allocation of costs across all activities.
The report includes:
• Visual breakdown of administrative and investment management costs in relation to peers and wider market participants.
• Ability to see what your scheme is paying service providers in comparison to the wider industry, and a full analysis into the breakdown of costs.
The report will be tailored to different levels of stake-holder education/experience, to ensure that maximum insight is delivered enabling you to remain in control 24/7.
Contact
To learn more about how KAS BANK can help you understand your costs please contact:
Develop - Cost Transparency Solutions