This study provides a framework forcomparison and benchmarking of administrative expendituresof public and private social security programs. The paperpresents the genesis of the inquiries into the subject,reviewing some of the most relevant literature onadministrative expenditures and the costs of mandatoryprograms produced over the past two decades. Thequantitative analysis builds on the extensive body ofliterature, but our framework evolved considerably fromearlier studies. Our dataset includes over 100 observationsand a broad set of explanatory variables. The authorsdeveloped and compared a number of standardized cost indicesdiscussing their advantages and limitations. The author alsodiscusses major cost components and their shares in totalprogram costs. The analysis explains over 90 percent ofvariation in administrative expenditures. It confirms someof the hypotheses expressed in the earlier studies andpresents new evidence of driving factors for costs. Theauthor developed three different specifications forstatistical analysis. The first set looks at the impact ofdesign of a program on total costs. The second group ofspecifications assesses differences in costs of managingpension liabilities between the public and private mandatorypension schemes. Finally, on the basis of the third modelthe author generate benchmarks for staffing levels and forthe total administrative expenditures. The author comparesthose to the actual indicators and develops standardperformance ratios, providing insights into designvariations and performance of the programs. The authorconcludes with a discussion of data limitations andimplications of our findings.
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