(May 1, 2103) — Over three quarters of Dutch pension funds think they are paying too much for the services they receive and want to pay less, a survey has revealed.
Some 76% of Dutch pension funds responding to a survey by State Street said there was scope to reduce their costs, compared to 56% of respondents in the UK and 44% of Nordic pensions.
Across the whole group, 56% said there was further scope to compress costs, despite recent efforts to drive down fees and outlays.
Sven Kasper, responsible for regulatory, industry and government affairs in Europe, the Middle East and Africa at State Street said this could mean pensions committing to outsourcing more of their functions – including investment – to gain better efficiency.
As fees look set to compress, pension investors are aware their jobs are about to get harder – and they may be demanding more from providers.
State Street said 81% of respondents to the survey thought their investment decisions would become more complex in the next five years. A low interest rate, low growth environment and persistent funding shortfalls meant investors felt they would have to be more creative to find answers to their problems, Kasper said.
In relation – or possibly reaction – to this presumed increase in complexity, 76% of respondents thought smaller pension investors would look to outsource all aspects of fund management over the next five years. This could lead to an uptick in the number of fiduciary or multi-asset contracts being awarded across the continent.
Regulation has become an ever-present burden on pension investors, the survey showed, with 79% of respondents citing demands from regulators and ratings agencies as either a slight or significant challenge.