McLagan Pension Cost and Performance Benchmarks

Understanding Pension Costs

Pension funds in the UK now have greater access to cost data through the Cost Transparency Initiative.

When asset managers complete the Cost Transparency Initiative (CTI) templates, the cost, performance, and asset allocation data for the mandates they manage on behalf of pension funds, the pension scheme trustees get a clearer picture of the costs for their mandates.

Benchmark Performance Against the Market

While this cost data gives trustees a detailed picture of their own mandates, it does not give them a view of the wider market. They can’t see the costs for comparable mandates and investment strategies, and then make informed decisions about what their data really means.

Analysing pension cost data, McLagan produces benchmark reports which show a pension fund’s mandates vs the relevant market, i.e. compared to mandates of similar size and equivalent strategy.

As these benchmarks compare both costs and performance against the market, this gives pension funds and their advisers the insight into the data they need to make informed decisions about their strategies.

How to use Benchmarks

Understand your costs

Assess fees and expenses paid against comparable mandates in the market

How much am I paying asset managers for each mandate? How do the fees breakdown?
How do the fees stack up relative to the market?
What are the cost trends in the market vs my mandates?

Understand your mandate performance

Build a clear picture of how the mandates are performing