Peer Intelligence | Summer 2023

By Edsart Heuberger

CEM spent over 2,000 person-hours reviewing the public disclosures of the five largest pension organizations in fifteen different countries. This initiative is part of the Global Pension Transparency Benchmark, a collaboration between Top1000funds.com and CEM, that brings a focus on transparency to improve pension outcomes for members.

Here are five key insights from the 2023 results.

1. For the first time in two years, a new fund takes pole position

CPP Investments topped the list of the most transparent funds in the first two editions of the transparency benchmark. This year, they were narrowly nudged out by the Government Pension Fund Global (Norway) and, rounded out by Australian Super, now form a competitive top three. The top three funds are separated by two points in total.

CPP Investments and Australian Super were the most transparent in their governance reporting. The Government Pension Fund Global had the best public disclosures on Performance and Responsible Investing. The Dutch fund, Stichting Pensioenfonds Zorg en Welzijn (PFZW), topped the list for cost transparency.

In past editions of Peer Intelligence, we’ve highlighted best practices from the Government Pension Fund Global and CPP Investments.

2. Funds made tangible changes to drive measurable improvements

Fifty-eight of the 75 reviewed organisations improved their total transparency scores. The average fund scored 60 out of 100, an improvement of five points relative to 2022. Four of the five transparency leaders increased their transparency the most: some have publicly declared their intent to be the most transparent pension organizations in the world.

3. Canadian funds once again demonstrate strength in transparency

Canadian funds finished first among the countries reviewed. They achieved an average score of 83 out of 100, with all five Canadian funds finishing within the top 10 funds globally. Not only did the Canadian funds disclose more information but they also used engaging websites and digestible reports for storytelling.

The Dutch funds also deserve an honourable mention for their transparency. Collectively, they provided the best disclosures on cost and responsible investing.

4. Responsible Investing disclosures saw the greatest year-over-year improvement

While responsible investing practices are of growing importance globally, responsible investing disclosures scored the lowest of the four factors in our inaugural review. After wide ranging improvements in the past year, responsible investing was no longer the lowest scoring factor. We observed some positive insights:

• Funds were more likely to provide quantification of their responsible investing initiatives;
• More funds went a step further and provided context by laying out longer-term goals;
• Several funds started producing standalone reports focused exclusively on responsible investing which provided comprehensive overviews of their programs.
  

The average fund scored 59 out of 100 on responsible investing relative to 49 in 2022.

5. Funds are more engaged on transparency

In 2022, transparency scores for individual funds were published for the first time. This year we provided funds with more transparency on the review process and added a new appeals process for funds to dispute results. Nearly half the funds engaged in the review process, diving more deeply into their 2023 scores.

In case you are interested, as part of this year’s process we identified over 120 reporting best practices, in addition to the best practices examples from the last two years of reviews. These best practice examples provide a proven roadmap for funds hoping to improve their own disclosures and are available through our Transparency Benchmarking subscription. If you would like more information on this initiative, please reach out to us or your CEM Relation Manager directly.