Improving the Cost Efficiency of Australian Pension Management

11 Pages Posted: 1 Jun 2010

See all articles by Wilson N. Sy

Wilson N. Sy

Investment Analytics Research

Kevin Liu

The University of Sydney

Date Written: Spring 2010

Abstract

Recent advances in investment performance measurement and cost analysis are applied to suggest ways to improve Australian pension management. Using empirical data collected by the Australian Prudential Regulation Authority in 2006, we show that investment performance of different types of Australian pension firms is significantly correlated with their average costs. We identify benefits from increased scale (fund size), better fee negotiation, more direct investing, less active management, and better fund alignment with member interests.

Keywords: Benefit, Cost, Investment, Pension Fund, Performance Metric

Suggested Citation

Sy, Wilson N. and Liu, Kevin, Improving the Cost Efficiency of Australian Pension Management (Spring 2010). Rotman International Journal of Pension Management, Vol. 3, No. 1, 2010, Available at SSRN: https://ssrn.com/abstract=1618830 or http://dx.doi.org/10.2139/ssrn.1618830

Wilson N. Sy (Contact Author)

Investment Analytics Research ( email )

12 Gilchrist Place
Balmain East, NSW 2041
Australia
0424669802 (Phone)

Kevin Liu

The University of Sydney ( email )

University of Sydney
Sydney, 2006
Australia

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