Comparison of retirement fund costs: challenges faced by decision-makers
New standardised disclosure measures will expose hidden costs and fees in retirement fund products
Layers of fees and costs in the retirement fund industry, combined with a lack of standardised disclosure, have left employers and trustees struggling to compare products in this market. The new Association for Savings and Investment South Africa (Asisa) standard on fee disclosure for retirement funds is aimed at improving transparency across the entire retirement industry. Quaniet Richards, head of institutional at Nedgroup Investments, says the new Asisa Retirement Savings Cost Disclosure standard will require retirement charges to be reflected across four components over various investment periods: investment management charges; advice charges; administration charges; and “other charges”, including regulatory, compliance and governance costs. “This is a welcome development in an industry that has been plagued with opaque fee structures and we fully support this implementation next year. It will make the analysis of fees and costs associated with retirement funds on umbrella funds...
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