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Assessing Administration Charges For The Affiliate In Individual Account Systems

Author

Listed:
  • Carlos Vidal- Meliá

    (Universitat de València)

  • José E. Devesa- Carpio

    (Universitat de València)

  • Rosa Rodríguez- Barrera

    (Universitat de València)

Abstract

In any pension system based on capitalization, affiliates have to cover certain explicit costs which in a pay-as-you-go system would be implicit. In this paper we set out a model based on Whitehouse (2000) and Diamond (1999) to enable the explicit costs borne by the affiliate both during his working life and his retirement period to be assessed. It also shows the relationships between the different ways of measuring the costs that make up the total price finally paid by the contributors. Included in the model is the notable effect that some factors -such as gaps in contribution profiles, account transfers and changes in salary profiles- have on projecting the costs borne by the affiliates. Finally we carry out an international comparison of administration costs from the point of view of the affiliate, focusing special attention on the countries of Latin America and Spain. This has a double objective: 1.- To test the validity of criticisms made by some researchers as to whether the new capitalization systems introduced in Latin America are too expensive to run for the affiliates. 2.- To serve as a reference for the individual pension scheme system in Spain. En un sistema de pensiones basado en la capitalización los afiliados deben hacer frentea unos costes explícitos que en el sistema de reparto son implícitos. En este trabajo sedesarrolla un modelo, basado en Whitehouse (2000) y Diamond (1999), que permite evaluarlas comisiones explícitas que soporta el afiliado, tanto durante la vida laboral como durante laetapa de jubilación y que, además, muestra la relación entre las diferentes medidas de loscostes que integran el precio total que finalmente pagan los cotizantes. En el modelo seintroduce el efecto de algunos aspectos que tienen una repercusión muy importante en laproyección de los costes que soportan los afiliados: ¿vacíos¿ en los perfiles de aportación,efecto de los traspasos de fondos y cambio en los perfiles de salarios. Por último, se realizauna comparación internacional de los costes de administración desde la óptica de los afiliadoscon un doble objetivo:1.-Contrastar la validez de la crítica realizada por algunos investigadores a los nuevossistemas de capitalización individual implantados en América Latina, en el sentido de que sonexcesivamente caros de gestionar para los afiliados.2.-Servir de referencia para el sistema de planes de pensiones individuales en España.

Suggested Citation

  • Carlos Vidal- Meliá & José E. Devesa- Carpio & Rosa Rodríguez- Barrera, 2002. "Assessing Administration Charges For The Affiliate In Individual Account Systems," Working Papers. Serie EC 2002-09, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  • Handle: RePEc:ivi:wpasec:2002-09
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    File URL: http://www.ivie.es/downloads/docs/wpasec/wpasec-2002-09.pdf
    File Function: Fisrt version / Primera version, 2002
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    Cited by:

    1. Carlos Vidal-Meliá & Inmaculada Domínguez-Fabian, 2005. "The Spanish Pension System: Issues Of Introducing Notional Defined Contribution Accounts," Public Economics 0504006, EconWPA.
    2. Carlos Vidal-Melia & Ana Lejárraga-García, 2004. "The Bequest Motive And Single People’S Demand For Life Annuities," Public Economics 0405005, EconWPA.

    More about this item

    Keywords

    Capitalización; Costes de Administración; Fondo de pensiones; América Latina. Capitalization; Administration Costs; Pension Funds; Latin America;

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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