Kas Bank, a specialist service provider to the pension industry, has claimed that the Netherlands’ move toward a standard cost disclosure has resulted in significant savings for pension schemes.
As a result of the Dutch regulations, Kas Bank, which services around a third of the Dutch pension market, found that the average total cost of ownership per pension scheme it services decreased by 37% between 2015-2016.
Pensions savings best practice
The Dutch cost reporting framework has been best practice for seven years; with the requirement to report on costs to the regulator in effect since 2015.
According to Kas Bank, the framework has enabled pension funds to effectively evaluate and breakdown the total costs, including transaction costs, associated with running a scheme.
Over the 2015-2016 period, the average pension management cost per scheme decreased by 31%.
The Dutch pension industry has undergone significant consolidation, which has also contributed to cost savings.
Kas Bank believes the UK could learn much from the Dutch transparency experience.
Pat Sharman, managing director, Kas Bank, said: “Having supported our pension fund clients in achieving cost transparency in the Netherlands, we’ve taken a leading role in the UK, helping the pension’s market bed in a new system of cost disclosure.
“Research into the Dutch market clarifies cost transparency delivers multiple benefits, including better decision making and ultimately an overall reduction in costs.”
