The Investment Company Institute has responded in kind to a recent study that found that mutual fund investors shoulder exorbitant management fees.

The original report, by professors John Freeman and Stewart Brown, concluded that equity fund management fees were 25 basis points higher than necessary on average, resulting in annual overcharges to investors of $9 billion.

The ICI’s response, authored by the Institute’s senior economist Sean Collins, takes exception to these findings, charging that by comparing mutual fund management expenses to those of pension funds, the Freeman-Brown study “fails to compare apples to apples.” ICI’s report asserts that investment advisors provide more services and incur more expenses than pension fund portfolio managers, rendering the two incomparable.

“You’re paying the advisor for a package of services at a mutual fund—a whole array, such as selecting securities, asset allocation, making securities trades, as well as general administrative and business services,” says Matt Fink, president of the ICI. By contrast, the external advisor of a pension fund has a more limited role, says the ICI report, and much of the related expenses are absorbed by the board of trustees, officers and staff.

When the calculations are adjusted to reflect these factors, the ICI contends, the supposed “overcharges” to investors shrink significantly. To affect this adjustment, Collins’ report uses the fees paid by sub-advised mutual funds, because, “the sub-advisory fee is reported separately [no administration costs included] and thus can be directly compared with the fee paid to the external manager of a pension plan.”

Collins concludes that “overall, the fees are similar, averaging 28 basis points for public pension plans and 31 basis points for subadvised mutual funds.”

Freeman and Brown’s method of calculating found a much greater disparity: investment managers handling a large-cap portfolio received 52 basis points, while pension fund managers received only 21 basis points. Unsurprisingly, the pair of professors strongly disagrees with the ICI’s conclusions and with the use of sub-advisors’ fees as a basis for calculations.

“Focusing on the sub-advised mutual fund space is ridiculous,” Freeman says. “Ninety-three percent of mutual funds are not sub-advised…It ain’t representative of the mutual fund market,” says Freeman.