Recent analyses show that the total yearly costs of occupational funds − which include management fees, administrative costs and the fees paid to the custodian bank − average about 0.60 per cent. For open pension funds and insurance products the total costs and fees are even higher − 1.4 and 2.6 per cent on average, respectively.
The expansion of the net asset value of pension funds may well reduce these costs, due to economies of scale. However, the process is likely to be slow and could be insufficient to lower the level of fees significantly. To speed up and reinforce the process, an increase in competition in the asset management industry, fostered by domestic and international competitors, will be necessary.