Is my pension fund more expensive? Estimating equivalent assets-based and contribution-based management fees

Daniel Mantilla-García, Manuel E. García-Huitrón, Alvaro Concha-Perdomo and Julian R. Aldana-Galindo

Journal of Business Research, 2023, vol. 167, issue C

Abstract: International comparisons of pension fund charges are important in identifying cost- effective structures for funded retirement systems. Heterogeneity in the type of base used to set management fee rates across jurisdictions constitutes a barrier for this type of studies. To overcome this, a closed formula is derived to estimate the contributions-based rate equivalent to a given assets-based rate. Besides enabling international comparisons, the formula allows to calculate the net returns of funds with contribution-based fees. The results of an empirical application in a set of Latin American countries suggest that the conclusions about fee drivers in retirement systems can vary significantly depending on the rate conversion method used.

Keywords: Retirement systems; Pension reform; Management fee drivers (search for similar items in EconPapers)
JEL-codes: G23 J32 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:167:y:2023:i:c:s0148296323004599

DOI: 10.1016/j.jbusres.2023.114101

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