TY - JOUR
T1 - What drives the growth of an open pension fund?
AU - CHIESI, GIAN MARCO
AU - VALLETTA, Mario
AU - ZOCCHI, PAOLA
PY - 2024
Y1 - 2024
N2 - This paper investigates the relationship between growth and quality of pension funds. It measures growth in terms of changes in the number of participants and cash flow transfers and appreciates the quality of the funds through the set of information on past results and costs published in the official prospectuses. The results show that growth rewards the best performing funds in the long term, while annual performance and costs have no relevance. Nevertheless, other factors, such as market power and commercial pressure, appear to be more powerful. The existence of conditions of market power capable of attracting investors beyond the actual quality of pension products is undesirable as it harms future pensioners. These results have implications for the Authority, as mandatory information should be suitable to induce investors to identify the best products and direct individual choices toward the public objective of a more efficient market.
AB - This paper investigates the relationship between growth and quality of pension funds. It measures growth in terms of changes in the number of participants and cash flow transfers and appreciates the quality of the funds through the set of information on past results and costs published in the official prospectuses. The results show that growth rewards the best performing funds in the long term, while annual performance and costs have no relevance. Nevertheless, other factors, such as market power and commercial pressure, appear to be more powerful. The existence of conditions of market power capable of attracting investors beyond the actual quality of pension products is undesirable as it harms future pensioners. These results have implications for the Authority, as mandatory information should be suitable to induce investors to identify the best products and direct individual choices toward the public objective of a more efficient market.
KW - DC pension funds
investment prospectus
market frictions
performance evaluation
KW - DC pension funds
investment prospectus
market frictions
performance evaluation
UR - https://iris.uniupo.it/handle/11579/191403
U2 - 10.1017/S1474747224000088
DO - 10.1017/S1474747224000088
M3 - Article
SN - 1474-7472
SP - 1
EP - 16
JO - Journal of Pension Economics and Finance
JF - Journal of Pension Economics and Finance
ER -