Improving Pension Management and Delivery: An (Im)Modest and Likely (Un)Popular Proposal

6 Pages Posted: 30 Oct 2009

See all articles by Ronald Geoffrey Bird

Ronald Geoffrey Bird

University of Technology Sydney (UTS) - School of Finance and Economics; Financial Research Network (FIRN)

Jack Gray

University of Minnesota - Twin Cities

Date Written: October 13, 2009

Abstract

The single-minded aim of retirement savings policy is to maximize after-cost returns to members while providing products and services to meet individual needs. In that it fails. The dominant cause of failure is ineffective and unnecessary competition. The dominant solution is greater cooperation. This article demonstrates how excessive competition has undermined investors’ ability to save for retirement through inefficient pricing, agency costs, and excessive choice. To ensure more cooperation, and less competition, the authors propose a three-pronged approach: Structuring management arrangements to extract maximum economic growth and investment returns; taking steps to rid the system of over-servicing; and, structuring relationships to minimize agency costs. While the authors use Australia as their institutional setting, their (im)modest, and likely (un)popular proposal has universal (un)appeal and applicability.

Keywords: Agency Costs, Co-opetition, Industry Rationalization, Market Failures, Pension Fund

Suggested Citation

Bird, Ronald Geoffrey and Gray, Jack, Improving Pension Management and Delivery: An (Im)Modest and Likely (Un)Popular Proposal (October 13, 2009). Rotman International Journal of Pension Management, Vol. 2, No. 2, 2009. Available at SSRN: https://ssrn.com/abstract=1493342 or http://dx.doi.org/10.2139/ssrn.1493342

Ronald Geoffrey Bird

University of Technology Sydney (UTS) - School of Finance and Economics ( email )

Haymarket
Sydney, NSW 2007
Australia
+ 612 9514 7716 (Phone)
+ 612 9514 7711 (Fax)

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Jack Gray (Contact Author)

University of Minnesota - Twin Cities ( email )

420 Delaware St. SE
Minneapolis, MN 55455
United States

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