Tax advantages are also very large: after 30 contribution years the final balance accrued to a younger worker joining a pension fund would be almost 24 percent greater than that accrued to a worker who invests directly in financial assets; more than half of the advantage would be due to the deductibility of contributions and another third to the preferential taxation of benefits.
13  Choi, Laibson and Madrian (2005). 14  Even small variations in charges lead to big difference in the final balance assigned to workers on retirement.