IDEAS home Printed from https://ideas.repec.org/a/bla/jbfnac/v26y1999i3-4p261-281.html
   My bibliography  Save this article

Evaluating the Financial Performance of Pension Funds: An Individual Investor’s Perspective

Author

Listed:
  • Paul J.M. Klumpes
  • Michael McCrae

Abstract

Pension funds require the managerial expertise of financial intermediaries, who must be paid a fee or spread. The spread significantly reduces the value of the pension fund over longer holding periods, and implies significantly greater incentive conflicts for defined contribution‐funded pension funds than for defined benefit‐funded pension funds. The magnitude of the intermediary spread and those factors affecting the demand for financial intermediary reputation and the marginal fee for this reputation are examined for a sample of 66 defined contribution and 54 defined benefit Australian pension funds during 1991–93. The intermediary spread significantly reduces the average net return provided to individual investors, particularly for defined contribution pension funds. Agency‐related factors affecting the demand for financial intermediary reputation and its marginal fee reflect underlying contract‐based differences between these types of fund.

Suggested Citation

  • Paul J.M. Klumpes & Michael McCrae, 1999. "Evaluating the Financial Performance of Pension Funds: An Individual Investor’s Perspective," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 26(3‐4), pages 261-281, April.
    • Handle: RePEc:bla:jbfnac:v:26:y:1999:i:3-4:p:261-281
    DOI: 10.1111/1468-5957.00256
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1468-5957.00256
    Download Restriction: no
    File URL: https://libkey.io/10.1111/1468-5957.00256?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Paul Klumpes, 2000. "Incentives and disincentives for voluntary disclosure by pension funds: international evidence," Accounting and Business Research, Taylor & Francis Journals, vol. 30(4), pages 287-298.
    2. Adam Clements & Michael E. Drew, 2007. "Institutional Homogeneity and Choice in Superannuation," School of Economics and Finance Discussion Papers and Working Papers Series 218, School of Economics and Finance, Queensland University of Technology.
    3. Paul Cox & Stephen Brammer & Andrew Millington, 2007. "Pension Fund Manager Tournaments and Attitudes Towards Corporate Characteristics," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 34(7‐8), pages 1307-1326, September.
    4. Milos Kopa & Kristina Sutiene & Audrius Kabasinskas & Ausrine Lakstutiene & Aidas Malakauskas, 2022. "Dominance Tracking Index for Measuring Pension Fund Performance with Respect to the Benchmark," Sustainability, MDPI, vol. 14(15), pages 1-28, August.
    5. Mercedes Alda & Luis Ferruz, 2012. "The Role of Fees in Pension Fund Performance. Evidence from Spain," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 62(6), pages 518-535, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jbfnac:v:26:y:1999:i:3-4:p:261-281. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0306-686X .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.