The government’s auto-enrolment provider NEST has teamed up with KAS Bank to offer a cost transparency service for its range of target date and specialist funds, to launch in Q2 2019.
This will build on KAS Bank’s cost transparency dashboard which launched in 2017 for defined benefit (DB) schemes. It is now being used by 10 UK DB schemes, with the £3.2bn Superannuation Arrangements of the University of London being the first to sign up to the service mid-2017.
The next step for the platform is to solve issues for DC schemes when it comes to value for money and investment cost reporting, with NEST being the first, following regulations which came into force in April last year. The rules require trust-based schemes, including master trusts to publish information to members, beneficiaries and recognised trade unions for all investment options available to members on an annual basis.
KAS Bank UK branch managing director Pat Sharman said: “We’ve had first-hand experience in pioneering cost transparency in the Netherlands and recognise it’s a growing area for the UK given scrutiny of costs is ramping up.”
The dashboard will be available online and via an app to provide key cost transparency data.
NEST director of fund administration Henk Michels added: “Pension schemes like NEST have been asked by [the] government to find ways to help outline transaction costs to our members, something we fully support.
“We’re therefore looking forward to working with KAS Bank, providing transaction data from our fund managers into their cost transparency tool and see what solutions it can offer the wider industry.
“We’re firm believers in strong governance and happy to support innovation which promotes transparency.”
Cost transparency rules for trust-based DC schemes came into force after the Financial Conduct Authority begun mandating its regulated firms looking after DC assets to disclose transaction cost information to trustees where requested, using a slippage cost methodology, from 3 January 2018.