The impact of scale, complexity, and service quality on the administrative costs of pension funds: A cross-country comparison
Jacob Bikker (),
O.W. Steenbeek and
F. Torracchi
No 10-15, Working Papers from Utrecht School of Economics
Abstract:
Administrative costs per participant appear to vary widely across pension funds in different countries. These costs are important because they reduce the rate of return on the investments of pension funds, and consequently raise the cost of retirement security. Using unique data on 90 pension funds over the period 2004–2008, this paper examines the impact of scale, the complexity of pension plans, and service quality on the administrative costs of pension funds, and compares those costs across Australia, Canada, the Netherlands, and the US. We find that, except for Canada, large unused economies of scale exist. Analyses on a disaggregated level confirm economies of scale for small and medium pension funds. Even though the pension funds in the sample are among the largest in the world, further cost savings appear to be possible. Higher service quality and more complex pension plans significantly raise costs, whereas offering only one pension plan reduces costs, as does a relatively large share of deferred (or sleeping) participants. Administrative costs vary significantly across pension fund types, with differences amounting to 100%.
Keywords: Pension funds; Administrative costs; Scale economies; Service level; Complexity; Optimal scale; Ordered by external client (search for similar items in EconPapers)
Date: 2010
New Economics Papers: this item is included in nep-age and nep-eec
References: View references in EconPapers View complete reference list from CitEc
Citations:
Downloads: (external link)
https://dspace.library.uu.nl/bitstream/handle/1874/180108/10-15.pdf (application/pdf)
Related works:
Journal Article: The Impact of Scale, Complexity, and Service Quality on the Administrative Costs of Pension Funds: A Cross-Country Comparison (2012) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:use:tkiwps:1015
Ordering information: This working paper can be ordered from
Access Statistics for this paper
More papers in Working Papers from Utrecht School of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Marina Muilwijk ().