Pension Fund Efficiency: An International Comparison of Australian Performance

Using a sample of 256 pension funds from Australia, Canada, the United States and Europe for the period 2004 to 2012, we use data envelopment, cluster and multivariate analysis to compare performance. We find high efficiency scores for many smaller corporate funds and lower efficiency scores for larger Australian industry and retail funds. Among US, Canadian and European pension funds passive investment management outperforms active. Defined contribution and public offer fund types perform least well. We attribute the generally lower efficiency scores for Australian funds to the higher degree of separation between managers and beneficiaries which exists in Australia, where delegation of responsibility is widespread.