Administrative Costs and Equilibrium Charges with Individual Accounts
In: Administrative Aspects of Investment-Based Social Security Reform
AbstractThere are many individual account proposals. For government-organized accounts, the government arranges for both record-keeping and investment management. For privately-organized accounts, individuals directly select private firms to do these tasks. The government spreads the costs of government-organized accounts among accounts, outside sources of revenue, employers and workers. With privately-organized accounts, equilibrium prices reflect selling costs as well as administrative costs. Thus, government-organized accounts are organized on a group basis while privately-organized accounts are organized on an individual basis. In financial and insurance markets generally, the group and individual markets function very differently and yield different pricing structures. The paper describes a low cost/low services government-organized plan and estimates that it might cost $40-50 per worker per year. The nature of equilibrium with privately-organized accounts is discussed, with the conclusion that the costs would be very high compared to the cost of government organization.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
This chapter was published in:
This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 7470.
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Other versions of this item:
- Peter Diamond, 1999. "Administrative Costs and Equilibrium Charges with Individual Accounts," NBER Working Papers 7050, National Bureau of Economic Research, Inc.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Olivia S. Mitchell & James M. Poterba & Mark J. Warshawsky, .
"New Evidence on the Money's Worth of Individual Annuities,"
Pension Research Council Working Papers
97-9, Wharton School Pension Research Council, University of Pennsylvania.
- Olivia S. Mitchell, 1999. "New Evidence on the Money's Worth of Individual Annuities," American Economic Review, American Economic Association, vol. 89(5), pages 1299-1318, December.
- Olivia S. Mitchell & James M. Poterba & Mark J. Warshawsky, 1997. "New Evidence on the Money's Worth of Individual Annuities," NBER Working Papers 6002, National Bureau of Economic Research, Inc.
- Malcolm Edey & John Simon, 1998. "Australia's Retirement Income System," NBER Chapters, in: Privatizing Social Security, pages 63-97 National Bureau of Economic Research, Inc.
- Olivia S. Mitchell, 1996.
"Administrative Costs in Public and Private Retirement Systems,"
NBER Working Papers
5734, National Bureau of Economic Research, Inc.
- Olivia S. Mitchell, 1998. "Administrative Costs in Public and Private Retirement Systems," NBER Chapters, in: Privatizing Social Security, pages 403-456 National Bureau of Economic Research, Inc.
- Olivia S. Mitchell, . "Administrative Costs in Public and Private Retirement Systems," Pension Research Council Working Papers 96-4, Wharton School Pension Research Council, University of Pennsylvania.
- Diamond, Peter, 1992. "Organizing the Health Insurance Market," Econometrica, Econometric Society, vol. 60(6), pages 1233-54, November.
- James M. Poterba & Mark J. Warshawsky, 1999.
"The Costs of Annuitizing Retirement Payouts from Individual Accounts,"
NBER Working Papers
6918, National Bureau of Economic Research, Inc.
- James M. Poterba & Mark Warshawsky, 2000. "The Costs of Annuitizing Retirement Payouts from Individual Accounts," NBER Chapters, in: Administrative Aspects of Investment-Based Social Security Reform, pages 173-206 National Bureau of Economic Research, Inc.
- Peter Diamond, 1998. "The Economics of Social Security Reform," NBER Working Papers 6719, National Bureau of Economic Research, Inc.
- Douglas W. Elmendorf & Jeffrey B. Liebman & David W. Wilcox, 2001. "Fiscal Policy and Social Security Policy During the 1990s," NBER Working Papers 8488, National Bureau of Economic Research, Inc.
- RenÃ© Weber & David S. Gerber, 2007. "Aging, Asset Allocation, and Costs," IMF Working Papers 07/29, International Monetary Fund.
- Impavido, Gregorio & Rocha, Roberto, 2006. "Competition and performance in the Hungarian second pillar," Policy Research Working Paper Series 3876, The World Bank.
- Ronald Fischer & Pablo González & Pablo Serra, 2003. "The Privatization of Social Services in Chile: an Evaluation," Documentos de Trabajo 167, Centro de Economía Aplicada, Universidad de Chile.
- D'Amato, Marcello & Galasso, Vincenzo, 2002. "Aggregate Risk, Political Constraints and Social Security Design," CEPR Discussion Papers 3330, C.E.P.R. Discussion Papers.
- Peter A. Diamond & Peter R. Orszag, 2005. "Saving Social Security," Journal of Economic Perspectives, American Economic Association, vol. 19(2), pages 11-32, Spring.
- Rowena A. Pecchenino & Patricia S. Pollard, 2001.
"Government mandated private pensions: a dependable foundation for retirement security?,"
1999-012, Federal Reserve Bank of St. Louis.
- Pecchenino, R.A. & Pollard, P.S., 1999. "Government Mandated Private Pensions: A Dependable Foundation for Retirement Security?," Papers 9902, Michigan State - Econometrics and Economic Theory.
- Lindbeck, Assar & Persson, Mats, 2002.
"The Gains from Pension Reform,"
Working Paper Series
580, Research Institute of Industrial Economics.
- Antón Pérez, José Ignacio, 2006. "The Reform of the Pension Systems in Easterm Europe and these Impact about the Efficiency and Equity/La reforma de los sistemas de pensiones en Europa del Este y su impacto sobre la eficiencia y la eq," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 24, pages 643 (20 pÃ¡, Agosto.
- Peeters, Marga, 2011. "“Better Safe than Sorry” - Individual Risk-free Pension Schemes in the European Union - Macroeconomic Benefits, the Mobile Working Citizen’s Perspective and Why Nots," MPRA Paper 33571, University Library of Munich, Germany.
- Alan Siu, 2002. "Hong Kong's Mandatory Provident Fund," Cato Journal, Cato Journal, Cato Institute, vol. 22(2), pages 317-332, Fall.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.