1. Colin Meech
CWC conference 2018
Cost Transparency

2. Why do fund managers drive Maserati but we don’t?

3. UK Market: Cost transparency – increasingly in the news

4. UK Developments 2013 Office of Fair Trading report on DC costs
2016 LGPS takes Dutch template and updates it
Creates code of Cost Transparency
FCA Asset Management Market Review July 2017 – and establishes Institutional Disclosure Working Group
DC scheme trustees must report on costs as of April 2018
Template updated again – due to be published this Month
Parliamentary Work and Pensions Committee inquiry into pension fund costs closed September 3rd

5. The pension fund economic cycle
Any surplus money has to be invested by law – LGPS investment regulations
Fund managers who have been hired by your pension fund buy and sell assets
The investment returns are sent back with trading costs extracted but we no one knows what they are in detail
Contributions paid in – your deferred pay 6% plus your employer contribution
Benefits are paid out this is collective intergenerational solidarity

6. Would you buy a car without knowing the cost?
Consumers do know how much it costs to buy a car, service it, by parts for it and measure its performance (MPG) set by the manufacturer
No lay person or pension scheme understands costs incurred in the management of our money
Pension funds’ cost of production is therefore unknown – reductions in costs improve the performance – but you cannot do this without knowing the cost
Hidden costs eat our pension away – costs make employers close DB
Hidden costs impose burden on employers and mean less for jobs, wages and investments

7. Code of Transparency
The Code - 90 managers signed up covering £280b in assets - over 40% of total assets and over 90% of listed equity assets
£21b
£16b
£36b
£5b
£4b
£11b
£13b
£9b
£4b
£5b