Netherlands, 6 September 2023
EY and IBI Benchmarking are coming together to assist pension boards in handling investment & administrative costs and charges (IA-cost) before, during, and after the transition to the Wet toekomst pensioenen (Wtp) or Future Pensions Act. By combining benchmarking and consultancy, a powerful and well-documented insight into the treatment of costs as an integral
part of the Wtp transition is created. Amendments and motions during the handling of the Wet toekomst pensioenen have brought significant attention to the treatment of IA-cost as part of the transition. It is essential to accurately manage and account for these IA-cost. IBI Benchmarking and EY will jointly support pension funds in managing, reporting, explaining, and documenting IA-cost before, during, and after the transition to the new system.
Costs play a crucial role as they impact the final pension amount. Amendment 136 to the Wet toekomst pensioenen grants the accountability or stakeholders' body the right to provide advice regarding policy choices that have an impact on IA-cost. Motion 142 focuses on unacceptably high costs for asset management. Even though Amendment 146 and Motion 124 were rejected, they also related to the level of IA-cost. This shows that politics closely monitors the IA-cost as part of the Wtp transition. IBI and EY can help pension funds with transparent reporting, documentation, communication, and cost optimization based on IBI benchmarking reports, ultimately leading to better results for participants, lower costs for employers, and a better understanding of the level of IA-cost.
"Under Wtp, the cost level is even more critical because the costs are directly deducted in euros from the reserved pension assets. Furthermore, a proper explanation is necessary because, unlike the current system, costs within one pension fund can vary due to different investment profiles," says Eric Veldpaus, Director of IBI. "Together with EY, we can now focus on potential optimization areas during the Wtp transition. This way, we can maximize the benefits that benchmarking offers to the pension fund."
"The transition to the new system demands a lot from the implementation organizations and pension funds. Controlling data, implementing and potentially replacing systems, and (re)structuring organizations for new functions are required. Additionally, the government expects IA-cost to ultimately be lower, and the minister will also have to steer in this direction," says Tim Burggraaf. "With the help of the IBI Benchmarking report, we can work together with pension funds on the highlighted areas of concern. Moreover, we can see that governance regarding IA-cost is well-established. Through benchmarking before, during, and after the transition, accountability can be provided to supervisory bodies around the pension fund, and we are building a 'better working world.'"
About EY At EY, we are committed to building a better working world. Our advice and high-quality services help build trust in the global capital markets and economies. We develop leaders who work together to fulfill our promises to all our stakeholders. In a world that is changing faster than ever, our purpose serves as the compass that guides our organization of over 250,000 people, giving context and meaning to our daily activities.
About IBI IBI has been benchmarking the IA-cost of Dutch pension funds in relation to risk and return since 2013, taking into account complexity and service levels based on Dutch laws and regulations, recommendations on IA-cost, and AFM guidelines. Over the past 10 years, the independent IBI has helped 74 different Dutch pension funds understand and contextualize their costs. These 74 funds represent the pensions of 13.6 million participants in the Netherlands, which is 71% of all participants, including former participants.