IAPF Spring 2018 Irish Pensions Magazine

IRISH PENSIONS MAGAZINE | SPRING 2018 | 27 EXPERT OPINION At Aon we have also created a suite of FREE tools and checklists to help with the efficiency of scheme management and to help reduce bias in decision making. For your free copy of these checklists and guides, please email: Betty O’Reilly: betty.oreilly@aon. com or speak with your usual Aon representative. Notes 1) Adams & Ferria, 2010; Gul et al, 2011 2) Clark et al, 2006 3) Market in Financial Instruments Directive (Directive 2004/39/EC). fees. These and other costs may be added to the AMC to make up the Total Expense Ratio (TER) or Ongoing Charges Figure (OCF) which is the true cost which must be recovered before an investor begins to make any gain. When Trustees were asked their level of familiarity with these implicit costs and fees there was a significant difference in the responses between trustees of large and smaller schemes. Clearly there is an education process to be undertaken with many trustee groups to improve understanding in this area. Conclusion - Managing the Trusteeship Challenge Strong Trustee board governance is critical to managing the issues we have identified, such as behavioural bias and lack of investment knowledge. Fortunately, there are a number of options to address these challenges. Alternative governance methods such as Master Trusts, professional trusteeship or delegation of investment via fiduciary management can each help in steering the right path and producing better outcomes for members and sponsors. ARTICLE AUTHOR Betty O'Reilly Senior Investment Consultant Aon