Competition among Dutch pension funds: is there any?

Working paper 739
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Published: 16 July 2025

By: Jaap A. Bikker Jeroen Meringa

This paper adds to the literature by analysing for the first time the functioning of the Dutch pension funds market from a competition or efficiency perspective. Of course, competition is severely limited on this highly regulated market. The analyses focus on a key property of well-functioning markets: the reward of efficiency. The conclusion can be drawn that in the market for pension funds efficiency is indeed rewarded, up to a certain level. New regulations on cost transparency and on the quality of pension boards, and the ongoing consolidation among pension funds may be explanations for this development over time. At the same time, the level at which efficiency is rewarded is very low compared to other financial sectors such as the life insurance and banking sector.

Keywords: Competition; efficiency; net investment returns; market shares; pension funds
JEL codes D4; H55; G22; G23; G28

Working paper no. 739

739 - Competition among Dutch pension funds: is there any?

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Research Highlights:

  •     Efficiency in the market for pension funds is rewarded, be it limited, pointing to (weak) competition
  •     Higher management costs leads to lower net returns on investments and to smaller market shares
  •     This is due fully to scale economies
  •     This effect is reflected in larger pension funds taking over smaller ones
  •     The impact of efficiency on returns or on market shares is very low compared to the life insurance and banking sectors

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