Abstract

http://ssrn.com/abstract=2090096
 
 

References (26)



 
 

Citations (6)



 
 

Footnotes (21)



 


 



Defined Contribution Pension Plans: Sticky or Discerning Money?


Clemens Sialm


University of Texas at Austin - McCombs School of Business; National Bureau of Economic Research (NBER)

Laura T. Starks


University of Texas at Austin - Department of Finance

Hanjiang Zhang


Nanyang Technological University - Nanyang Business School

August 20, 2014

Journal of Finance, Forthcoming

Abstract:     
Participants in defined contribution (DC) retirement plans rarely adjust their portfolio allocations, suggesting that their investment choices and consequent money flows are sticky and not discerning. However, participants’ inertia could be offset by DC plan sponsors, who adjust the plan’s investment options. We examine these countervailing influences on flows into U.S. mutual funds. We find that flows into funds from DC assets are more volatile and exhibit more performance sensitivity than non-DC flows, primarily due to adjustments to the investment options by the plan sponsors. Thus, DC retirement money is less sticky and more discerning than non-DC money.

Number of Pages in PDF File: 55

Keywords: Flow-Performance Sensititivity, Defined Contribution Pension Plans, Retirement Savings

JEL Classification: G20, G23, G11


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Date posted: June 24, 2012 ; Last revised: February 2, 2015

Suggested Citation

Sialm, Clemens and Starks, Laura T. and Zhang, Hanjiang, Defined Contribution Pension Plans: Sticky or Discerning Money? (August 20, 2014). Journal of Finance, Forthcoming. Available at SSRN: http://ssrn.com/abstract=2090096 or http://dx.doi.org/10.2139/ssrn.2090096

Contact Information

Clemens Sialm (Contact Author)
University of Texas at Austin - McCombs School of Business ( email )
Austin, TX 78712
United States
HOME PAGE: http://faculty.mccombs.utexas.edu/Clemens.Sialm/
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Laura T. Starks
University of Texas at Austin - Department of Finance ( email )
Red McCombs School of Business
Austin, TX 78712
United States
512-471-5899 (Phone)
512-471-5073 (Fax)
Hanjiang Zhang
Nanyang Technological University - Nanyang Business School ( email )
S3-B1A-05 Nanyang Avenue
Singapore, 639798
Singapore
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References:  26
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