Rise in administrative costs
In the period 1992 - 2013, the average number of pension fund members more than quadrupled as a result of consolidation in the pension sector and growth in the number of employed workers. Despite technological progress, the administrative expenses per member (adjusted for inflation) edged up. This rise can be attributed to factors including stricter reporting and supervision requirements and more complex investment strategies and products.
Differences between pension funds of varying size
Against this background, the differences in Dutch pension funds' administrative costs are considerable and mainly relate to size. Fig. 1 shows the administrative costs per member for pension funds of varying sizes in 2012. Administrative costs for the smallest size category amount to an average of EUR 575 per member, compared to a mere EUR 50 per member for the largest size category, which is more than ten times lower. However, within size categories, too, administrative costs vary. This is attributable to pension schemes' variation in complexity and service level. Another reason is the organisational efficiency level of pension funds and their pension providers.