^aInstituto Superior de Economia e Gestão, Technical University of Lisbon, Rua Miguel Lupi, 20, Lisbon 1249-078, Portugal. E-mails: Cbarros@iseg.utl.pt, mtgarcia@iseg.utl.pt

Abstract

The enhanced role of occupational and personal pension plans in providing retirement income raises issues concerning efficiency and performance.¹ This paper evaluates the performance of Portuguese pension fund management companies from 1994 to 2003, using a Cobb–Douglas stochastic cost frontier model to generate their efficiency scores. We conclude that the price of labour, the price of capital-management services and the price of capital-premises, as well as profits, the number of participants, the number of closed funds and the decision whether or not to manage open funds all play a major role in the efficiency of such companies. We also find that the efficiency scores are mixed. The managerial implications of these results are derived.