Australia has achieved an impressive third place in the Global Pension Transparency Benchmark (GPTB), which measures the level of public disclosure from large pension funds in countries around the world.
The GPTB ranks 15 countries in public disclosures of key value-generation elements for the five largest pension fund organisations in each country.
The ranking system focuses on the quality of public disclosures with quality relating to the completeness, clarity, information value and comparability of disclosures. The GPTB is a collaboration between Investment Magazine’s Top1000.com and CEM Benchmarking.
The overall country and fund scores look at four major factors: governance and organisation; performance; costs; and responsible investing.
Australia’s positive result is mostly driven by the rise of AustralianSuper in the rankings from seventh to third place across individual fund rankings, with an individual transparency score of 87 out of 100.
In fact, AustralianSuper was the only Australian-based fund to crack the top 10 rankings, with the next best, Aware Super, ranked 12th.
Canada took out top spot as the most transparent market for pension funds, with all five of the country’s major pension funds represented in the top 10. This is the third year in a row that Canada has led the world in pension transparency.
Edging out Australia in second spot is the Netherlands, while Australia’s pension funds are slightly more transparent than those of Sweden, ranked fourth.
Additionally, Australia achieved a second-place ranking for governance disclosure and third place for both cost disclosure and performance disclosure. This was boosted by AustralianSuper being individually ranked the equal best fund in the world for governance disclosure, along with Canada’s CDPQ and CPP funds.
However, on the responsible investments disclosure measure, Australia dropped to eighth place, outflanked by various European funds. Regrettably, no Australian funds made it among the top 10 for this measure.
AustralianSuper reached 11th place overall for this measure, appearing alongside the UK’s Universities Superannuation Scheme and Finland’s Ilmarinen Mutual Pension Insurance Company.
Why is transparency important for a pension fund?
The researchers say a lack of transparency can have negative consequences for relationships and organisations of all types, whether they be individuals, governments, corporations, or pension funds.
But being transparent also has many financial benefits beyond the simple moral imperative, the researchers say.
“Transparency and accountability go hand in hand and lead to improved decision making,” the report reads.
“Improved relationships and interactions across a broad spectrum of stakeholders including beneficiaries, plan sponsors, regulators, suppliers and concerned citizens.
“Ultimately, better outcomes [are achieved] through clarity of purpose, sound goals and accountability for progress.”
Where did your fund rank on the list? Would you say you’re happy with how transparent your fund is? Let us know in the comments section below.
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