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Administrative Expenses in Statutory and Occupational Pension Schemes: A Cross-country Comparison

This review examines the administrative expenses of the statutory pension schemes of Denmark, Germany, the Netherlands, Norway, Sweden and Switzerland (so-called Pillar I schemes) and of the occupational pension schemes (so-called Pillar II schemes) that together form the overall pension provision in Finland.

The Finnish earnings-related pension forms part of statutory social security, but our earnings-related pension scheme has many features that are connected to occupational pensions (so-called Pillar II supplementary pensions), that are based on labour market agreements. Compared to other countries, the Finnish earnings-related pension is proportional to the statutory pension provision as well as the occupational pension provision agreed on by the labour markets, and fulfils the assignment of both. Occupational pensions, common in many other countries, are rare in Finland.

This review examines the administrative expenses of the statutory pension schemes of Denmark, Germany, the Netherlands, Norway, Sweden and Switzerland (so-called Pillar I schemes) and of the occupational pension schemes (so-called Pillar II schemes) that together form the overall pension provision in Finland. The review does not examine private pension saving or the administrative expenses of organisations supervising the pension schemes. By administrative expenses is meant operating expenses and investment expenses.
Operating expenses are formed from expenses arising from indemnity operations and pension insurance management, as reported by companies and pension providers in their profit and loss accounts, as well as from expenses arising from insurance acquisition and administration. The review also reports on the management expenses of investment operations to the degree that this is possible, considering the limitations of the information available. Due to said limitations, a comparison between countries concerning the total administrative expenses, in other words the combined operating expenses and management expenses deriving from investment operations, is not sufficiently comprehensive.