upko - Uniform pension expense overview
an important step for the participants
The Institutional Benchmarking Institute (IBI) and Brightlands Institute for Smart Society (BISS) are launching the Uniform Pension Cost Statement, UPKO. This overview is a response to the AFM's call - earlier this year - to inform participants about the costs of their pension in an accessible manner. Uniformity is important here, especially with a view to the arrival of the new pension system.
Together with Prof. Dr. Lisa Brüggen - professor of financial services at Maastricht University and internationally recognized expert in pension communication - IBI and BISS have worked carefully to create UPKO. The result is a clear document that can be used as a uniform reference document for all parties. That makes communication easier.
In the annual overview, the pension fund's administration costs are reported uniformly in context, in accordance with the instructions of the AFM and in accordance with the Federation of the Dutch Pension Funds' Recommendations on Implementation Costs. The implementation costs are grouped into three components:
pension management costs - these are the costs of administration, communication, management and supervision
asset management costs - these are the costs incurred by the fund to invest the pension money
transaction costs - these are the buying and selling costs of investments
The costs of the fund are grouped uniformly per component in the overview. Asset management costs are reported in the context of return and risk and using cost benchmarks (referred to in the Recommendations as 'the associated benchmark costs'). A link is also made to the investment mix and the degree of active management. Pension management costs are reported in context by linking service level, number of plans, complexity of those plans, nature of fund, amount of value transfers and communication strategy. The implementation costs are also compared per component with the relevant peer group.
The uniform pension cost overview informs you about the administration costs of your pension funds, uniformly and in the right context. This ensures clear and consistent communication.
The overview is made available by IBI as part of the reporting to all pension funds that participate in the IBI Benchmarking report 2021 for the reporting year 2020. The pension funds can then make this part of the benchmarking available to all their participants.