The Global Pension Transparency Benchmark launches in a bid to improve pension outcomes for members

February 17, 2021 8:00 AM EST

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TORONTO, Feb. 17, 2021 /PRNewswire/ - The Global Pension Transparency Benchmark has revealed the opportunity for improvement in pension fund disclosure transparency around the globe.

The Global Pension Transparency Benchmark is a world first global benchmark measuring transparency of pension disclosure, bringing a focus to transparency in a bid to improve pension outcomes for members.

The GPTB ranks 15 countries on public disclosures of key value generation elements for the five largest pension fund organisations within each country.

The GPTB focuses on the transparency and quality of public disclosures with quality relating to the completeness, clarity, information value and comparability of disclosures.

The overall country benchmark scores look at four factors: governance and organisation; performance; costs; and responsible investing; which are measured by assessing hundreds of underlying components.

Overall the transparency of disclosure varies greatly, both between countries and between funds, across all the factors that were measured. In some instances there are wild variances between the best and worst performers.

Pension funds around the world scored best on performance disclosure, followed by governance, cost and responsible investment.

But only performance could be considered a decent score (average country score of 68). While some countries and funds scored well on certain factors, on average transparency of disclosure needs improvement.

Principal at CEM Benchmarking, Mike Heale, says the benchmark has highlighted the areas where improvement is needed.

"We noted many areas for improvement within the overall global results. In many instances, disclosures for responsible investing, costs, and governance were non-existent or minimal. Transparency builds trust. It is the right thing to do and the smart thing to do. There is much room for improvement," Heale said.

Despite the overall disappointing results there were some notable examples of best practice. The Dutch funds were exemplary when it came to cost disclosure; the five largest Canadian funds had the highest average score for governance and organisation supporting their reputation for governance excellence; and US pension funds scored well on the transparency of performance disclosure.

The Global Pension Transparency Benchmark is the first formal collaboration between Top1000funds.com and CEM Benchmarking.

"We are passionate about improving the global pension industry and we think shining the light on these elements that drive value will do that," says Amanda White, editor of www.top1000funds.com 

Transparency, or lack of it around costs and other issues, has been a problem area for pension funds over many years, and in the industry there is room for improvement in this area.

"Transparency is a positive word – it is about being honest and open with stakeholders. With this benchmark we offer a standard for global pension systems and funds to aspire to, and in doing so emphasise the importance of the need for clarity and openness," says Heale.

Cost transparency emerged as an important issue for pension funds post-GFC and many in the industry championed it.

This new benchmark reframes the narrative away from a narrow and negative focus on costs to a more holistic and positive concept of transparency and include value generation, governance and strategy, and sustainability.

To review the findings, methodology analysis of the factors and individual countries visit  https://www.top1000funds.com/global-pension-transparency-benchmark/

The Global Pension Transparency Benchmark advisory board:

  • Keith Ambachtsheer, president, KPA Advisory Services; co-founder and board member, CEM
  • David Atkin, deputy chief executive, AMP Capital
  • Lorelei Graye, founder, Adopting Data Standards
  • Angélique Laskewitz, director, Association of Investors for Sustainable Development
  • Neil Murphy, vice-president, communications, Investment Management Corporation of Ontario

About CEM Benchmarking

CEM Benchmarking is an independent provider of cost and performance benchmarking information for pension funds and other institutional asset owners worldwide. It believes 'what gets measured gets managed' and is deeply committed to helping clients run cost-effective operations that generate value for their stakeholders. With vast industry knowledge and a robust database spanning 28 years and $10+ trillion in AUM, CEM helps more than half of the world's top 300 pension schemes understand and manage their costs and performance. CEM also facilitates better pension outcomes by sharing cutting edge research derived from its proprietary databases.

About www.top1000funds.com

Top1000funds.com is the market leading news and analysis site for the world's largest institutional investors. It focuses on leading the global investment industry to continuous improvement through case studies of best practice in governance and decision making, portfolio construction and efficient portfolio management, fees and costs, and sustainable investing.The publication pushes the industry to question whether status quo processes and behaviours to tackle risks and opportunities will be sufficient in the future, and actively campaigns for diversity, sustainability, transparency, innovation and better alignment of fees in the investment industry. Top1000funds.com is read by investment professionals in more than 40 countries.

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SOURCE CEM Benchmarking Inc.



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