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Administrative costs of Dutch pension funds: the impact of fund characteristics

Author

Listed:
  • Carlos Heitor Campani

    (Professor at The Coppead Graduate School of Business (Federal University of Rio de Janeiro))

  • Ian De Ridder

    (Researcher at The COPPEAD Graduate School of Business (Federal University of Rio de Janeiro))

Abstract

Administrative costs per participant vary widely across pension funds, even when economies of scale are considered. Defining potential sources of these costs is important because such costs decrease the rate of return pension funds achieve on their participants' assets. Consequently, these costs decrease future pensions. This article seeks to gain a better understanding regarding which other factors impact administrative costs incurred by pension funds using data on over 200 Dutch pension funds concerning the year of 2015. The study confirms that scale economies were the most significant indicator of lower administration costs per participant. Furthermore, it is found that the amount of assets per participant held by a fund had a significant positive relation with costs.

Suggested Citation

  • Carlos Heitor Campani & Ian De Ridder, 2019. "Administrative costs of Dutch pension funds: the impact of fund characteristics," Economics Bulletin, AccessEcon, vol. 39(2), pages 1361-1370.
    • Handle: RePEc:ebl:ecbull:eb-18-00665
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2019/Volume39/EB-19-V39-I2-P129.pdf
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    References listed on IDEAS

    as
    1. Bateman,Hazel & Kingston,Geoffrey & Piggott,John, 2001. "Forced Saving," Cambridge Books, Cambridge University Press, number 9780521484718, January.
      • Bateman,Hazel & Kingston,Geoffrey & Piggott,John, 2001. "Forced Saving," Cambridge Books, Cambridge University Press, number 9780521481625.
    2. Bateman, Hazel & Mitchell, Olivia S., 2004. "New evidence on pension plan design and administrative expenses: the Australian experience," Journal of Pension Economics and Finance, Cambridge University Press, vol. 3(1), pages 63-76, March.
    3. Jacob A. Bikker & Onno W. Steenbeek & Federico Torracchi, 2012. "The Impact of Scale, Complexity, and Service Quality on the Administrative Costs of Pension Funds: A Cross-Country Comparison," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 79(2), pages 477-514, June.
    4. Bikker, Jacob A. & De Dreu, Jan, 2009. "Operating costs of pension funds: the impact of scale, governance, and plan design," Journal of Pension Economics and Finance, Cambridge University Press, vol. 8(1), pages 63-89, January.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Keywords: Pension funds; administrative costs; economies of scale; assets per participant;
    All these keywords.

    JEL classification:

    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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