Comparison between Charges on Flow and Charges on Balance in Individual-Account Pension Systems

Authors

  • Luis Chávez-Bedoya
  • Nelson Ramírez Rondán

DOI:

https://doi.org/10.21678/apuntes.78.835

Keywords:

Pension funds, front-end load fee, balance fee, individual accounts.

Abstract

In this present article, we develop a discrete-time methodology to comparefront-end load and balance fees in the accumulation phase of a definedcontributionpension fund under a system of individual accounts. Using thismethodology, we study the effect of risk aversion and other relevant variables inthe performance and suitability of the aforementioned types of fees. Finally, wecarry out a practical application and show the results for the Peruvian PrivatePension System, including indifference values between fees and certaintyequivalent ratios.

Downloads

Download data is not yet available.

Downloads

Published

2016-05-27

Issue

Apuntes 78: Pensions Systems in Latin America

Section

Articles

License

Apuntes publishes all its articles and reviews under a Creative Commons Attribution (CC BY 4.0) license with the objective of promoting academic exchange worldwide. Therefore, articles and book reviews can be distributed, edited, amended, etc., as the author sees fit. The only condition is that the name of the author(s) and Apuntes. Revista de Ciencias Sociales (as the publisher) be cited.

How to Cite

Chávez-Bedoya, L., & Ramírez Rondán, N. (2016). Comparison between Charges on Flow and Charges on Balance in Individual-Account Pension Systems. Apuntes. Social Sciences Journal, 43(78), 61-88. https://doi.org/10.21678/apuntes.78.835