The U.K. Pensions and Lifetime Savings Association published top tips on how to best use cost-disclosure templates aimed at helping trustees of retirement funds compare money managers' offerings and watch their costs.
The templates, introduced in May by the PLSA's Cost Transparency Initiative, and already supported by more than 300 U.K. retirement plans and money managers, are compatible with Europe's Markets in Financial Instruments Directive II's obligations on fee disclosure and could be used by both defined contribution and defined benefit plans.
Alyshia Harrington-Clark, policy lead for the Cost Transparency Initiative, said the templates' guidance was quite detailed about the format of the fee disclosure so the PLSA wanted to outline to the trustees how they could approach requesting the information needed for the templates. "We wanted to link that gap," Ms. Harrington-Clark said.
In its top tips, which were released Nov. 20, the PLSA recommended that trustees discuss with money managers and service providers when, and how often, they would like to receive costs and fee information via the templates, noting that an appropriate review should take places annually.
Th U.K. association of retirement plans also wants trustees to be aware that the templates might not require enough detail from money management firms to track costs sufficiently, noting that additional information might be required. Trustees should also look at investment performance over an appropriate time horizon, the PLSA said. "CTI templates should be a start of a conversation not the end of one," the PLSA said.
Ms. Harrington-Clark added that while the templates do not provide a benchmark to show trustees their costs vs. peer costs, it does show total portfolio costs across all asset classes and managers.