AdmExp |
Total yearly administrative expenses of EFPC, in millions of R$ of 2014. |
We searched literature that contained this variable as dependent variable. |
Pop |
Total number of active participants and beneficiaries (retirees and pensioners). |
Used by Caswell (1976)Caswell, J. W. (1976). Economic efficiency in pension plan administration: A study of the construction industry. The Journal of Risk and Insurance, 43(2), 257-273. https://doi.org/10.2307/251979
https://doi.org/10.2307/251979...
as proxy for service to participants and beneficiaries; one of the sources of administrative expenses. |
Assets |
Total assets of EFPC at the end of each year, in billions of R$ of 2014. |
Mitchell and Andrews (1981)Mitchell, O. S., & Andrews, E. S. (1981). Scale economies in private multi-employer pension systems. Industrial & Labor Relations Review, 34(4), 522-530. https://doi.org/10.2307/2522475
https://doi.org/10.2307/2522475...
, Bateman and Mitchell (2004)Bateman, H., & Mitchell, O. S. (2004). New evidence on pension plan design and administrative expenses: The Australian experience. Journal of Pension Economics and Finance, 3(1), 63-76. https://doi.org/10.1017/S1474747204001465
https://doi.org/10.1017/S147474720400146...
, and Abi-Ramia et al. (2015)Abi-Ramia, M., Boueri, R., & Sachsida, A. (2015). Economias de escala e escopo na previdência complementar fechada brasileira. Economia Aplicada, 19(3), 481-505. Retrieved from https://www.revistas.usp.br/ecoa/article/view/106044/104696
https://www.revistas.usp.br/ecoa/article...
use this as a proxy for effort on portfolio management; the other source of administrative expenses. |
Plans |
Number of benefit plans under EFPC management. |
Bikker et al. (2012)Bikker, J. A., Steenbeek, O. W., & Torracchi, F. (2012). The impact of scale, complexity, and service quality on the administrative costs of pension funds: A cross-country comparison. The Journal of Risk and Insurance, 79(2), 477-514. https://doi.org/10.1111/j.1539-6975.2011.01439.x
https://doi.org/10.1111/j.1539-6975.2011...
use a dummy to indicate whether the entity manages just one plan or more than one plans. Abi-Ramia et al. (2015)Abi-Ramia, M., Boueri, R., & Sachsida, A. (2015). Economias de escala e escopo na previdência complementar fechada brasileira. Economia Aplicada, 19(3), 481-505. Retrieved from https://www.revistas.usp.br/ecoa/article/view/106044/104696
https://www.revistas.usp.br/ecoa/article...
include the logarithm of the number of plans as control variable. |
public |
A dummy that is 1 if the EFPC's sponsor is a public organization (usually state companies), and 0 (zero) otherwise. |
Used as control variable by Bikker et al. (2012)Bikker, J. A., Steenbeek, O. W., & Torracchi, F. (2012). The impact of scale, complexity, and service quality on the administrative costs of pension funds: A cross-country comparison. The Journal of Risk and Insurance, 79(2), 477-514. https://doi.org/10.1111/j.1539-6975.2011.01439.x
https://doi.org/10.1111/j.1539-6975.2011...
and Abi-Ramia et al. (2015)Abi-Ramia, M., Boueri, R., & Sachsida, A. (2015). Economias de escala e escopo na previdência complementar fechada brasileira. Economia Aplicada, 19(3), 481-505. Retrieved from https://www.revistas.usp.br/ecoa/article/view/106044/104696
https://www.revistas.usp.br/ecoa/article...
. Both found a positive relation between public sponsorship and expenses, which we analyze in this paper. |
outsource |
The percentage of contracted services over total administrative expenses. |
Bateman and Mitchell (2004)Bateman, H., & Mitchell, O. S. (2004). New evidence on pension plan design and administrative expenses: The Australian experience. Journal of Pension Economics and Finance, 3(1), 63-76. https://doi.org/10.1017/S1474747204001465
https://doi.org/10.1017/S147474720400146...
include the fraction of assets managed externally as a control variable. Bikker and De Dreu (2009)Bikker, J. A., & De Dreu, J. (2009). Operating costs of pension funds: the impact of scale, governance, and plan design. Journal of Pension Economics and Finance, 8(1), 63-89. https://doi.org/10.1017/s1474747207002995
https://doi.org/10.1017/s147474720700299...
analyze the contribution of outsourcing of all activities, including service to participants and beneficiaries, on efficiency of administrative expenses. Bikker (2017)Bikker, J. A. (2017). Is there an optimal pension fund size? A scale-economy analysis of administrative costs. The Journal of Risk and Insurance, 84(2), 739-769. http://dx.doi.org/10.1111/jori.12103
http://dx.doi.org/10.1111/jori.12103...
uses outsourcing of all activities as a control variable. |
CDorRJorSP |
Is a proxy for input prices. It is a dummy set equal to 1 if the EFPC headquarters is located in one of the 3 metropolises with a higher cost of living in Brazil; i.e., Brasilia (Capital District), Rio de Janeiro and São Paulo. |
Mitchell and Andrews (1981)Mitchell, O. S., & Andrews, E. S. (1981). Scale economies in private multi-employer pension systems. Industrial & Labor Relations Review, 34(4), 522-530. https://doi.org/10.2307/2522475
https://doi.org/10.2307/2522475...
propose that input prices should be considered in the analysis, but ignored this variable, assuming prices were the same for all funds. Bikker et al. (2012)Bikker, J. A., Steenbeek, O. W., & Torracchi, F. (2012). The impact of scale, complexity, and service quality on the administrative costs of pension funds: A cross-country comparison. The Journal of Risk and Insurance, 79(2), 477-514. https://doi.org/10.1111/j.1539-6975.2011.01439.x
https://doi.org/10.1111/j.1539-6975.2011...
analyze funds from different countries and find that location is relevant for administrative expenses, and might represent differences in input prices, such as wages. |
elctyear |
A dummy that is 1 in years with federal and state elections (2010 and 2014), and 0 (zero) otherwise. |
Dinç (2005)Dinç, I. S. (2005). Politicians and banks: Political influences on government-owned banks in emerging markets. Journal of Financial Economics, 77(2), 453-479. https://doi.org/10.1016/j.jfineco.2004.06.011
https://doi.org/10.1016/j.jfineco.2004.0...
uses a dummy for election year to account for political bias in the activities of state-owned banks. |