CTI expects ‘immediate’ take up as transparency templates launch

New templates aimed at delivering cost transparency across the pensions industry have been launched today, 21 May, by the Cost Transparency Initiative (CTI).

CTI hopes the new standards, which will make it easier for trustees to scrutinise and challenge costs and performance of asset managers and other pension service suppliers, will be adopted across the £2trn industry.

The government has said it will “legislate robustly” if the industry dies not adopt the templates “at speed”, while CTI expects trustees to engage with their asset managers “immediately”, with a view for asset managers to be in a position to report using the template against December 2019 and April 2020 year-ends.

Commenting on the launch, Pensions Minister Guy Opperman, said: “High fees can eat into savers’ pension pots and add to employers’ costs. This initiative will help pension schemes take a holistic view of costs and charges as they strive to ensure their members get value for money.

“I’d strongly encourage trustees and investment managers to embrace the CTI and adopt the new templates.”

CTI, launched in November 2018, has been helping to develop the templates first proposed by the former Institutional Disclosure Working Group, led by Chris Sier, and has run a pilot templates with around 20 participants including asset managers and schemes.

It hopes that the March 2019 pilot feedback will “also help shape future developments”.

CTI chair, Mel Duffield, said: “We will now push for wide-spread adoption of the templates and guidance over the next 12 months and promote the benefits both savers and pension fund trustees’ can experience from their use.

“The board will review the take-up of the templates and guidance after the end of the reporting period in April 2020 and will be working closely with government, regulators, and industry to ensure high adoption levels in the interim.”

The group was founded by the Pensions and Lifetime Savings Association (PLSA), the Investment Association (IA) and the Local Government Pension Scheme Advisory Board.

PLSA chief executive, Julian Mund, commented: “It’s a testament to the desire and commitment of all those involved in the CTI that we can now welcome these new standards into the marketplace.

“The PLSA remains committed to helping pension scheme trustees deliver greater value for money for millions of savers. By doing this we can help those savers achieve a better income in their retirements.”

The Pensions Regulator spokesperson added: “As part of our role to protect pension savers, we welcome the CTI’s work to help trustees be clearer on the transparency of costs and charges levied on members. We will be working with trustees to highlight the benefits of these new standards, including how they can help with member engagement activities.

"The standards should be particularly helpful for defined contribution schemes as they have a duty to publish costs and charges information from their annual chair’s statements.”

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