Extra attention for implementation costs: benchmarking belongs in the annual report
The Federation of the Dutch Pension Funds has requested extra attention for reporting implementation costs. One of the consequences is that pension funds must also include the results of benchmarking in their annual reports.
Reasons to benchmark
1. Monitor and reduce implementation costs.
2. Evaluate the strategy.
3. Establish a relationship between performance and costs.
4. Explain the financial consequences of policy choices.
5. Accountability to participants and the Supervisory Board.
Let's take a step back first. Why is benchmarking important for a pension fund? The implementation costs are the direct result of the policy pursued and therefore differ per pension fund. It is therefore difficult to compare different funds. Benchmarking shows the relationship between your fund's policy, asset management costs and performance.
Putting costs in context
To be in compliance, the funds must include a benchmark asset management fee figure. This is the easiest way to put costs into context. In doing so, the specific characteristics of the pension fund and the investment policy are taken into account . Relevant characteristics in pension management cost benchmarking include the different service levels, the number and complexity of those plans, the amount of value transfers and the communication strategy.
Benchmarking is more than a tick on the checklist to be in compliance with the reporting requirements. With the help of benchmarking, your pension fund can:
Monitor and reduce implementation costs;
Evaluate the strategy / policy;
Explain the financial consequences of policy choices;
Establish a relationship between performance and costs (for example, return and costs, service level and complexity of the pension scheme);
Profiling oneself in relation to other parties;
Accountability to participants, stakeholder body and the Supervisory Board in line with the AFM report "More attention needed for the justification of costs by pension funds" (April 2021)
Benchmarking for annual report
In order to meet the reporting requirements for the 2021 annual report, we request that you contact IBI for an explanation of the benchmarking report that fully complies with the Implementation Costs Recommendations.
That's why ibi benchmarking
IBI Benchmarking is an independent Dutch benchmark that makes it possible to compare the costs of pension funds fairly, focused on the Dutch pension sector and the legislation. To do this, we follow the Federation of the Dutch Pension Funds' Recommendations for Implementation Costs in full. IBI Benchmarking uses uniform and verified data and limits the costs of participation and the best efforts of the participants. Our report contains points for attention to improve performance and provides a good basis for explaining the implementation costs in the annual report.
If you have any questions, you can call me on my direct line: 020-208 8507.
I would be happy to speak to you.
Our spin charts show the influence of policy choices on implementation costs.
"In accountability to the outside world, the IBI Benchmark Report can especially add a lot of value in the area of cost transparency"
Click on the KPMG logo for the Vision document "Getting more out of benchmark reports"