Ten of the UK’s largest pension schemes have expressed their support for the Cost Transparency Initiative (CTI), writing in a letter to its chair that they “believe that greater cost transparency will help everyone achieve a better income in retirement”.
They said they intended to use the tools and cost reporting templates developed by the CTI “as far as appropriate to the specific circumstances of our scheme”.
In their joint letter to Mel Duffield, who is also pensions strategy executive at the Universities Superannuation Scheme, the 10 schemes also said they supported the templates being open source and free to download.
“If needed,” they added, “we also 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.”
The 10 schemes have more than 19 million members and £150bn (€166bn) in assets under management between them, and include schemes such as the pension fund for Royal Bank of Scotland Group and Royal Mail Pension Plan.
Their letter is thought to be the first such public collective statement of support for the industry cost transparency initiative.
Duffield, chair of the CTI, said: “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.
“We will [sic] working 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.”
The CTI was set up by pension funds and asset managers last year and launched its first reporting templates in May. At this time it said it expected trustees to “engage with their investment management suppliers immediately”, and for asset managers to be able to report costs for December 2019 and April 2020 year-ends using the templates.
Today’s public statement of support from the 10 pension schemes comes after a group of lawmakers last month called for the government to legislate for cost disclosure by asset managers. Adoption of the CTI disclosure templates is voluntary, although the pensions minister has threatened legislation if this approach did not deliver on expectations.
The CTI is supported by the £347bn Local Government Pension Scheme, the Investment Association and the Pensions and Lifetime Savings Association.
The schemes that put their name to the letter are:
- DHL Pensions Investment Fund
- Kingfisher Pension Scheme
- National Grid UK Pension Scheme
- RBS Group Pension Fund
- Royal Mail Pension Plan
- Smart Pension
- Superannuation Arrangements of the Universities of London (SAUL)
- The People’s Pension
- Universities Superannuation Scheme