The Cost Transparency Initiative (CTI) has today been launched, with the aim of bringing pension fund trustees new clarity from asset managers on costs and charges.
Backed by the Pensions and Lifetime Savings Association (PLSA), Investment Association (IA), and Local Government Pension Scheme Advisory Board (LGPS Advisory Board), the 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 launch of the initiative follows a report from the Institutional Disclosure Working Group’s (IDWG) to the Financial Conduct Authority (FCA) earlier in this year.
The group has appointed Mel Duffield as its first chair, and she has a long history within the sector and is currently the pensions strategy executive at the Universities Superannuation Scheme (USS). Before joining USS, she was deputy director at the Pensions Policy Institute (PPI), and the head of research and strategic policy at the PLSA.
“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,” Duffield said.
“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.”
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.
It also has the support of The Pensions Regulator, which said it looks forward to working with the CTI to raise awareness of the cost transparency templates with pension schemes. “This will enable trustees to scrutinise and challenge costs, and to assist them with ensuring that their members have a clear understanding of the costs they face."