The Economics of Low Pension Fees: Netherlands, Canada, Poland, and the United States

This paper examines determinants of low pension fees, comparing pension fees in the Netherlands, Canada, Poland, and the United States. The paper uses the framework of supply and demand, recognizing that pension fees are the prices for pension services. The level of pension fees has varied considerably across countries, over time, and within countries. In some cases, pension regulations have succeeded in reducing pension fees, for example, by increasing the transparency of pension fee disclosures (U.S.) or placing a cap on pension fees (Poland). Pension fees also differ across types of pension plans, tending to be higher in individual account plans than in defined contribution plans associated with employers, and tending to be higher in these plans than in defined benefit plans. Economies of scale for plans, individual account balances, and plan service providers all tend to lead to lower fees. The paper focuses on the level of pension fees regardless of whether the fees are paid by employers or participants. The paper finds that while traditionally, focusing on stocks and bonds was appropriate, now, with the growth of investments in alternative investments, particularly in defined benefit plans, that focus misses a major asset class. At least for Canada, the Netherlands, and the U.S., alternative investments tend to have high fees, and including them in the analysis greatly affects some of the results. Our regression results show that the effect of different variables differs to some extent across countries, so that the results of studies focusing on a single country are not necessarily applicable to other countries.

Netspar, Network for Studies on Pensions, Aging and Retirement, is een denktank en kennisnetwerk. Netspar is gericht op een goed geïnformeerd pensioendebat.


Missie en strategie           •           Netwerk           •           Organisatie           •          Podcasts
Board Brief            •            Werkprogramma 2023-2027           •           Onderzoeksagenda


Onze partners

B20160708_university of groningen
B20211201_Cardano_Logo 2021_website
AFM logo 2023 zwart wit
Bekijk al onze partners