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Fees in Individual Account Pension Systems: A Cross-Country Comparison

Author

Listed:
  • Waldo Tapia
  • Juan Yermo

    (OECD)

Abstract

This paper focuses on the fees that are charged to participants in mandatory, defined contribution pension systems, focusing on the experience of Latin America, Central and Eastern Europe, Australia, and Sweden. In order to compare fees across countries, this paper looks at the evolution of a simple cost measure, the ratio of annual fees to assets under management. The relatively high fee to assets ratios in some Latin American and Central and Eastern European countries can be partly explained by the recent implementation of their private systems. However, system maturity cannot explain all differences observed between countries. The paper argues that the particularly low fees observed in Bolivia and Sweden at the inception of their respective systems stem largely from a decision to force cost competition among providers via a central agency or =clearing house‘. Frais facturés aux particuliers ayant souscrit à un régime de retraite individuel : Comparaison entre plusieurs pays Ce document traite principalement des frais administratifs facturés aux particuliers ayant souscrit à un régime de retraite obligatoire à cotisations définies en mettant l‘accent sur les pratiques observées en Amérique latine, en Europe centrale et orientale, en Australie et en Suède. Pour pouvoir comparer les coûts d‘un pays à l‘autre, les auteurs examinent l‘évolution d‘une mesure simple des frais, à savoir le montant des frais annuels rapporté à celui des actifs gérés. Le niveau relativement élevé des ratios des frais de gestion relevés dans certains pays d‘Amérique latine et d‘Europe centrale et orientale peut être dû au fait que la mise en place de systèmes privés y est toute récente. Cependant, la maturité des systèmes ne peut expliquer toutes les différences observées entre les pays. Les auteurs affirment que le niveau particulièrement faible des frais facturés en Bolivie et en Suède dès la création de leurs systèmes respectifs est dans une large mesure imputable à la décision prise par ces pays de mettre les prestataires en situation de concurrence par les coûts grâce à la création d‘un organisme central ou ?chambre de compensation?.

Suggested Citation

  • Waldo Tapia & Juan Yermo, 2008. "Fees in Individual Account Pension Systems: A Cross-Country Comparison," OECD Working Papers on Insurance and Private Pensions 27, OECD Publishing.
  • Handle: RePEc:oec:dafaab:27-en
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    File URL: http://dx.doi.org/10.1787/236114516708
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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. The looming pensions crisis
      by brianmlucey in Brian M. Lucey on 2011-10-08 13:09:47

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    Cited by:

    1. Jacob Bikker, 2013. "Is there an optimal pension fund size? A scale-economy analysis of administrative and investment costs," DNB Working Papers 376, Netherlands Central Bank, Research Department.

    More about this item

    Keywords

    facilitation des échanges; fonds de pension; frais d'administration; pension fund;

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

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