ABSTRACT
This chapter makes comparisons of the administration costs of pension provisions by pension funds and life insurers. This is important for employers that have no access to pension provisions by a pension fund, including most self-employed people, and for enterprises that may choose the kind of institution for the pension provisions of its employees. First, the differences across pension plans of pension funds and life insurers are discussed. Second, operational costs and profits across the types of institutions are compared over long periods, where life insurer products are split into four categories: individuals versus groups and, for both categories, investment portfolio-linked versus guaranteed amounts in euros. This allows for more detailed insight in pension provision costs of life insurers. Finally, the impact of economies of scale on the cost comparison has been investigated.
