Benchmark will help build trust

Transparency is an important link in improving pension delivery, and the Global Pension Transparency Benchmark will help lift transparency standards and ultimately trust in pension institutions, according to its advisory board.

“It is hoped the benchmarking process will encourage a greater level of debate about lifting transparency standards within the pension community,” says David Atkin, deputy chief executive of AMP Capital. “By highlighting best practice, this should encourage everyone to improve their level of transparency and communication effectiveness. If key stakeholders have better levels of knowledge about the institutions that serve them, this will surely improve levels of trust and confidence in them as institutions.”

Transparency within the investment industry is not where it should be and it is hoped that the benchmark will focus attention on transparency as a lever for better outcomes.

Member of the GPTB advisory board Keith Ambachtsheer, who has been an advocate for better pension design for decades, says there is room for significant improvement when it comes to transparency.

“Real transparency is still a rare commodity in the pension industry. The GPTB initiative will help lift the veil on whether pension organisations are really creating value for their stakeholders… or not,” he says.

Lorelei Graye, has had vast experience in improving transparency in private asset disclosures during her time at South Carolina Retirement System Investment Commission and as the founder of the Adopting Data Standards Initiative aimed at building collaborative global data standards for private capital.

She says the the GPTB plays an important role for improved pension outcomes.

“Recognising the best examples in practice within our industry gives us all something to measure against and a standard for which to strive. I hope our work for the GPTB brings the need for consistency into sharp focus and elevates best practices,” she says. “Borrowing slightly from Mahatma Gandhi, I believe that a just cause is never damaged by truth and so transparency will ultimately only serve to strengthen the pensions and investments world because we thrive when markets, operations (including costs) are efficient, accurately measured, and effectively managed.”

Board member Angelique Laskewitz says that while the asset owner community has made great progress over recent years recognising the value of assessing governance in the investment decision making process and demanding greater levels of transparency from the companies they invest in to assess governance maturity and value creation, the same level of transparency has been slower within pension organisations.

“We have however, been slower in recognising that this level of good governance should also apply to the way we hold ourselves to account to the end beneficiaries we serve,” agrees fellow board member David Atkin. “To do this means being transparent about our strategies, how we make decisions, how we create long term value in all of its dimensions, how we hold ourselves accountable and how our stakeholders can assess our success in meeting their needs. Unfortunately much of the corporate reporting from the asset owner community currently  is focused on meeting minimum compliance requirements, rather than providing reportage that is engaging and meaningful.”

Atkin says that the GPTB is an important step in creating a public data set that enables benchmarking of the transparency quality of key asset owner institutions in leading economies around the world.

Similarly vice president of communications at Canadian fund IMCO, Neil Murphy, says pension funds need to look at the broader stakeholder community.

“As many pension organisations are active and significant investors in capital markets, there is an ever-increasing pressure to align with global financial disclosure standards. This form of transparency is directly linked to the trust they must foster among a wide range of stakeholders (beyond plan members), including investment partners, global media and government entities,” Murphy says.

“While public stakeholders may form opinions based on formal disclosures, which they may encounter through pension funds’ reporting, they increasingly draw conclusions on what they don’t see, or what is omitted. This underscores the critical nature of transparent, comprehensive and consistent reporting.”

Each member of the GPTB advisory board brings a unique perspective on the importance of transparency and reporting through their work experiences, and have been invaluable in advising the development of the benchmark.

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