The role of investor type in the fee structures of pension plans

The final publication is available at Springer via http://dx.doi.org/10.1007/s10693-015-0230-1

We examine the role of the investor type in the fee structure of pension plans. Our examination uses a data set of employer-sponsored and individual private pension funds in Spain. We find different determinants of the fees between these two pension plans. We find evidence of market penetration strategies in individual plans but none in employer-sponsored plans. In these plans, the fees are negatively related to their financial groups’ market share, whereas in individual plans this relation is negative for management fees but positive for custodian fees. Further, except in the case of custodian fees in individual plans, we find that all fees diminish when the custodian and management firms belong to different financial groups.

This paper has received financial support from the Spanish Ministry of Economy and Competitiveness (ECO2012-35946-C02-01). Isabel Abinzano particularly acknowledges the financial support of the Andalusian Regional Government (P12-SEJ-1733).