Abstract

https://ssrn.com/abstract=2847655
 


 



How Should Retirement Plans Be Organized?


Sureyya Burcu Avci


University of Michigan, Stephen M. Ross School of Business

M. P. Narayanan


University of Michigan, Stephen M. Ross School of Business

H. Nejat Seyhun


University of Michigan, Stephen M. Ross School of Business

October 1, 2016

New York University Journal of Law and Business, Vol. 13, No. 2, 2017, Forthcoming
Ross School of Business Paper No. 1332

Abstract:     
Americans have a tough time saving for their retirement. To make matters worse, the move from defined benefit (DB) to defined contribution plans (DC) over the years has required greater investor sophistication, discipline, and sound investment advice. Unfortunately, the current rules regarding investment advice for defined contribution plans do not address the two critical deficiencies of the current system, namely opacity and conflicts of interest. We propose that one-master standard be instituted along with strict transparency requirements to control the conflicts of interest and improve retirement savings advice. We also recommend that only passive, well-diversified index funds for stocks and bonds should qualify as retirement vehicles.

Number of Pages in PDF File: 58

Keywords: Defined contribution plans, pension funds, investment advice, transparency, conflict of interest

JEL Classification: J26, J32


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Date posted: October 4, 2016 ; Last revised: November 8, 2016

Suggested Citation

Avci, Sureyya Burcu and Narayanan, M. P. and Seyhun, H. Nejat, How Should Retirement Plans Be Organized? (October 1, 2016). New York University Journal of Law and Business, Vol. 13, No. 2, 2017, Forthcoming; Ross School of Business Paper No. 1332. Available at SSRN: https://ssrn.com/abstract=2847655 or http://dx.doi.org/10.2139/ssrn.2847655

Contact Information

Sureyya Burcu Avci (Contact Author)
University of Michigan, Stephen M. Ross School of Business ( email )
701 Tappan Street
Ann Arbor, MI MI 48109
United States
734-747-0219 (Phone)

M. P. Narayanan
University of Michigan, Stephen M. Ross School of Business ( email )
701 Tappan Street
Ann Arbor, MI MI 48109
United States
734-763-5936 (Phone)
734-936-0274 (Fax)

H. Nejat Seyhun
University of Michigan, Stephen M. Ross School of Business ( email )
701 Tappan Street
Ann Arbor, MI MI 48109
United States
734-763-5463 (Phone)

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