The UK is ranked sixth out of 15 countries for the transparency of its pension scheme disclosures, according to the first ever Global Pension Transparency Benchmark.
Topping this new benchmark was Canada, following by The Netherlands, Sweden, Australia and Denmark.
CEM Benchmarking has published this first global pension transparency benchmark report. The company publishes a range of global data sets, aimed at helping those in the industry assess the value for money in pension scheme investment and administration.
To compile this benchmark CEM ranked on the quality of its disclosure across our factors: governance and organisation; performance; costs; and responsible investing. These factors were then combined to give an overall score out of 100.
Principal at CEM Benchmarking, John Simmonds says: “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.”
He said that drilling down in to each of the different factors provides additional insight that the industry can build from:
- Governance: the UK ranked 5th, with a score of 63 out of 100. The high ranking was in part due to the disclosure of board competencies and qualifications.
- Costs: here the UK ranked 7th (56/100). The UK’s score and rank reflected the absence of asset class level cost disclosures.
- Responsible Investing: again the UK was ranked 7th, with a score of 47 out of 100. The UK scored well for RI governance, laying out where oversight of responsible investing resides and who is accountable.
- Performance: This was one of the worst ranking, with the UK’s average performance factor coming in 10th (with a score of 66 out of 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.”