Tomas Wijffels,
Senior Polocy Advisor,
The Federation of Dutch Pension Funds
The importance of cost transparency:
“Cost transparancy is of the utmost importance to the Federation of Dutch Pension Funds.
We believe that the pension industry is morally obliged to be transparent.
Pension funds have to provide an adequate retirement income at an acceptable price (contribution). The level of costs is crucial because it affects pension savings during an accrual period of several decades. Therefore costs have a significant impact on the eventual retirement income.
Cutting costs is not the primary goal. Costs should be evaluated in the context of risk and return on investment. This triangle should be taken into account by the management board of a pension fund during the entire decision making process.
The Federation of the Dutch Pension Funds published its most recent recommendations on costs in 2016. Cost transparency is no longer voluntary but also a legal obligation for pension funds in the Netherlands nowadays.
A next step should be to reach international agreement on how asset managers should calculate the level of costs and how they present this information to their clients. For this reason, we fully support the initiative of the Transparency Task Force. Together we can lift cost transparency to an even higher level.”