Return adjusted charge ratios: What drives fees and costs of pension schemes?
| Authors | |
|---|---|
| Year of publication | 2022 |
| Type | Article in Periodical |
| Magazine / Source | Finance Research Letters |
| MU Faculty or unit | |
| Citation | |
| Web | https://www.sciencedirect.com/science/article/pii/S1544612322002136 |
| Doi | http://dx.doi.org/10.1016/j.frl.2022.102954 |
| Keywords | Fees;Pension funds;Savings;Charge ratio;Bayesian model averaging |
| Attached files | |
| Description | We study the expensiveness of pension schemes across a set of developed and developing countries. To calculate the difference between accumulated savings with and without fees and costs, we construct return optimized charge ratio. We estimate charge ratios for 51 pension schemes and study which of the 40 potential factors can explain heterogeneity by the Bayesian model averaging framework. The most favorable fee structure can be characterized by the use of performance fees at the expense of more costly asset under management fees. The inflation rate, size and development of the economy tend to be priced into charge ratios. |