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IMA and NAPF set up a new code for fund firms

The IMA and the National Association of Pension Funds have set up a new code of practice for disclosing pension fund costs to improve transparency in response to recommendations by the Myners report.

The code, launched last week ahead of the NAPF&#39s annual conference in Brighton, has been designed to help pension fund trustees understand the charges and costs levied on pension fund assets and make it easier to discuss them with fund managers.

Fund managers will now have to disclose all costs incurred directly or indirectly by the pension portfolio during the fund management process to comply with the code.

The code requires fund managers to follow a twotier level of disclosure. Level one looks at company-wide policies, in-house processes and procedures relating to management of costs.

Level two focuses on clientspecific data such as identifying transaction costs in a more meaningful way for trustees. Fund managers can only claim compliance with the code if they comply with both levels.

The IMA hopes to have reporting systems in place to generate the information req-uired for level one by the end of the year. It wants level two to be included in half-yearly reporting periods by the first half of 2003.

The code has been drawn up by a joint IMA and NAPF working party, which will carry out a progress review within two years.

IMA chief executive Rich-ard Saunders says: “Pension fund trustees and their advisers are rightly concerned to monitor how their assets are being managed.

“This code will for the first time give clear but detailed and specific information to pension fund clients, which will enable them to understand and question how their funds are being used.”

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