Is there an optimal pension fund size? A scale-economy analysis of administrative costs

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      <subfield code="a">Bikker, Jacob a.</subfield>
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      <subfield code="a">Is there an optimal pension fund size? A scale-economy analysis of administrative costs</subfield>
      <subfield code="c">Jacob A. Bikker</subfield>
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      <subfield code="a">This article investigates scale economies and the optimal scale of pension funds, estimating different cost functions with varying assumptions about the shape of the underlying average cost function: U-shaped versus monotonically declining. Using unique data for Dutch pension funds over 1992-2009, we find that unused scale economies for both administrative activities are indeed large and concave, that is, huge for small pension funds and decreasing with pension fund size. We observe a clear optimal scale of around 40,000 participants during 1992-2000 (pointing to a U-shaped average cost function), which increases in subsequent years to size above the largest pension fund, pointing to monotonically decreasing average costs. These model-based outcomes are roughly in line with the results of a survivorship analysis</subfield>
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      <subfield code="0">MAPA20080590482</subfield>
      <subfield code="a">Economías de escala</subfield>
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      <subfield code="0">MAPA20080591021</subfield>
      <subfield code="a">Fondos de pensiones</subfield>
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      <subfield code="0">MAPA20080592011</subfield>
      <subfield code="a">Modelos actuariales</subfield>
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      <subfield code="w">MAP20077000727</subfield>
      <subfield code="t">The Journal of risk and insurance</subfield>
      <subfield code="d">Nueva York : The American Risk and Insurance Association, 1964-</subfield>
      <subfield code="x">0022-4367</subfield>
      <subfield code="g">05/06/2017 Volumen 84 Número 2 - junio 2017 , p. 739-769</subfield>
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