A verbal update will be given.

Contact: Peter Chadderton 07990 086399

The Pensions Investment and Responsible Investment Manager gave a verbal update in relation to a meeting which himself and the Pensions Investment Officer had attended in relation to Cost Transparency.  He explained that cost transparency was a scheme that the Scheme Advisory Board (SAB) had put into place and was a voluntary agreement for investment managers to provide all Local Government Pensions Scheme (LGPS) funds and pools with cost information in a standardised format supported by an online system which would give access to that information. 

Although not new, having been around since 2019, the SAB were now pushing it a bit more as it had grown over time, with a lot more manager take-up (90% of assets within LGPS were covered by 159 managers with a 95% template completion rate).  Also, up until 2023, they had only been able to include the costs for level one and two investments eg equities and bonds, but did not include any level three investments eg private market investments, infrastructure, private equity or some of the more complicated investments like insurance linked securities.  However, from April 2023 it was hoped to include level three investments within the template so there would be one data source where information on costs could be found.  The data could then be used to do comparisons with other LGPS funds and could be shared with the Pensions Board and Pensions Committee.  Although net performance was still the key driver, being able to look at costs in more detail would also be helpful going forward. A validation exercise would however need to be undertaken to ensure the data was accurate.  The other issue was that under the scheme, managers had 90 days from quarter end to submit the information so at year end they would have until the end of June whereas the deadline to produce the draft accounts was the end of May.  However, if the rest of the costs were validated it would give a better way to estimate what that final quarter would be.

The Pensions Investment and Responsible Investment Manager confirmed that the cost was covered within the SAB fees.  Once this had been looked into more thoroughly, he would bring a report back to the Board with some example reports.  Members felt this information would be invaluable.