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Return adjusted charge ratios: What drives fees and costs of pension schemes?

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  • Lučivjanská, Katarína
  • Lyócsa, Štefan
  • Radvanský, Marek
  • Širaňová, Mária

Abstract

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.

Suggested Citation

  • Lučivjanská, Katarína & Lyócsa, Štefan & Radvanský, Marek & Širaňová, Mária, 2022. "Return adjusted charge ratios: What drives fees and costs of pension schemes?," Finance Research Letters, Elsevier, vol. 48(C).
    • Handle: RePEc:eee:finlet:v:48:y:2022:i:c:s1544612322002136
    DOI: 10.1016/j.frl.2022.102954
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