The Global Pension Transparency Benchmark (GPTB), a new international measurement of transparency in pension disclosure, has revealed opportunities for improvement.
Mike Heale, principal at CEM Benchmarking, an independent provider of benchmarking information, said the new yardstick has highlighted the areas where improvement is needed.
“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 organization supporting their reputation for governance excellence, while U.S. pension funds scored well on the transparency of performance disclosure.
Lack of transparency an issue for a long time
Transparency, or lack of it around costs and other issues, has been a problem area for pension funds over many years.
"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 emphasize the importance of the need for clarity and openness," said Heale.
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, strategy and sustainability.
The GPTB ranks 15 countries on public disclosures of key value generation elements for the five largest pension fund organizations within each country.
