Administrative Costs in Public and Private Retirement Systems

Olivia Mitchell

No 5734, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper collects and analyzes available information on administrative costs associated with public and private retirement systems. We explore expenses of the US social security system and compare these with data from national systems in other countries. We find that administration costs of publicly-run social security systems vary a great deal across countries and institutional settings. A key factor influencing public old-age program costs is the system's scale: plans with more assets and more participants are less expensive. We also investigate expenses reported by US pension plans and mutual funds, programs seen by many as alternative mechanisms for managing retirement saving. Based on an analysis of costs associated with retirement savings plans managed by financial institutions, we conclude that privately managed old-age retirement programs would be somewhat more costly to operate than current publicly-managed programs, depending on the program's specific design. Nevertheless these costs would be accompanied by new services for participants.

Date: 1996-08
Note: AG
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Published as Privatizing Social Security, Feldstein, Martin, ed., Chicago: Universityof Chicago Press, 1998, pp. 403-456.
Published as Administrative Costs in Public and Private Retirement Systems , Olivia S. Mitchell. in Privatizing Social Security , Feldstein. 1998

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Chapter: Administrative Costs in Public and Private Retirement Systems (1998)
Working Paper: Administrative Costs in Public and Private Retirement Systems
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