Administrative costs as a percentage of assets vary widely between funds. Moreover, there are striking differences between large and small funds. Cost reduction is very effective in compensating for lower yields. As a representative of the pension sector, the Federation of Dutch Pension Funds has launched uniform measurement and reporting systems. This in turn makes benchmarking possible.
Peter Borgdorff, Zorg en Welzijn PFZW Pension Fund and member of IBI Sounding Board:
In the report ‘Looking in the Mirror’ we advocate a benchmark that is accessible to all pension funds in order to report on administrative costs in the right context. IBI Benchmarking creates this type of transparency and so offers this possibility. PFZW supports this Dutch initiative, and we encourage pension funds to participate in this accessible benchmark.
Federation of the Dutch Pension Funds: ‘Benchmark costs are the most simple and effective way to put asset management costs in context.’
Eric Veldpaus, Director Institutional Benchmarking Institute and initiator IBI Benchmarking
This is a logical next step in creating further transparency around administrative costs. Using this information, the Board can consider cost in the right perspective. After all, higher cost does not automatically lead to the conclusion a pension fund is expensive. Furthermore, IBI Benchmarking may also assist the Board in communicating the administrative costs of its pension fund to stakeholders.
Jeroen van der Put, PNO Media Pension Fund and a member of the IBI Sounding Board:
The public debate surrounding the role of pension funds is growing. Oftentimes the debate is oversimplified and takes place in headlines. By being honest and transparent, we as a sector are taken seriously and thus we can make our arguments count.
Jeroen van der Put: ‘By being honest and transparent, we as a sector are taken seriously…’
Tomas Wijffels, Federation of the Dutch Pension Funds (Pensioenfederatie):
IBI Benchmarking is compliant with the ‘Recommendations on administrative costs’ issued by the Federation of the Dutch Pension Funds. A good initiative. Our recommendations call upon pension funds to report costs in perspective, partly by publishing benchmark costs as a reference in the annual report. IBI Benchmarking help pension funds to reports their costs in a well-balanced manner.