CEM Benchmarking (CEM), the world leader in assessing value for money in pension scheme investment and administration, and Top1000funds.com, have published the first Global Pension Transparency Benchmark (GPTB) report, ranking the UK sixth out of the 15 countries assessed. The top five, in order of ranking, were Canada, The Netherlands, Sweden, Australia and Denmark.
Using hundreds of data points from the largest five schemes in each of the 15 countries CEM ranked each country on the quality of its disclosures across four factors: governance and organisation; performance; costs; and responsible investing. These factors were then combined to give an overall score out of 100, as shown below:
Principal at CEM Benchmarking, John Simmonds, commented, “The report highlights the need for serious improvement in pension transparency across the globe. Here in the UK, the overall result provides some comfort that we have a reasonably robust governance and disclosure regime for corporate pension schemes, although there wasn’t any particular area that shone out. There is clearly still plenty of room for improvement.”
“Drilling down in to each of the different factors provides additional insight that we can build from:
• Governance - the UK ranked 5th (63/100). The high ranking was in part due to the disclosure of board competencies and qualifications.
• Costs – the UK ranked 7th (56/100). The UK score and rank reflected the absence of asset class level cost disclosures.
• Responsible Investing - the UK ranked 7th (47/100). The UK scored well for RI governance, laying out where oversight of responsible investing resides and who is accountable.
• Performance – the UK’s average performance factor ranked 10th (66/100). The UK scored well in most areas but and would have ranked higher had asset class level performance been disclosed.
Simmonds concluded: “We’re doing OK in the UK but we can still learn from the Nordics, North Americans and Australians in particular. The existence of the benchmark will help because we now have a yardstick to measure ourselves and clarity about how we can improve.”
Background information
The overall country benchmark scores were derived from an equal weighting of four factors: governance and organisation; performance; costs; and responsible investing. 188 questions were asked, and 14,100 individual data points were analysed.
The review included fund websites, annual reports, financial statements, and various other published documents. Reasonable, but not exhaustive, efforts were made to find information. There were no questions asked of the pension funds reviewed about their disclosures (eg location of information, interpretation of documents). The premise is that key disclosures should not require extensive effort and time to find and understand. Transparency means information is easily accessible, ipso facto.
Important links with detailed data and information:
Country wise data - https://www.top1000funds.com/global-pension-transparency-benchmark-countries/
Detailed factor analysis:
• Cost - https://www.top1000funds.com/global-pension-transparency-benchmark-factors/#tabs-factors|0
• Governance - https://www.top1000funds.com/global-pension-transparency-benchmark-factors/#tabs-factors|1
• Performance - https://www.top1000funds.com/global-pension-transparency-benchmark-factors/#tabs-factors|2
• Responsible Investing - https://www.top1000funds.com/global-pension-transparency-benchmark-factors/#tabs-factors|3
Methodology - https://www.top1000funds.com/global-pension-transparency-benchmark-methodology/
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