Pension Plan Decisions

33 Pages Posted: 22 Jun 2020

See all articles by Alistair Byrne

Alistair Byrne

University of Edinburgh - Business School

David P. Blake

City, University of London

Graham Mannion


Date Written: September 1, 2009


We examine the contribution and investment decisions made by members of a large UKbased DC pension plan. We find that many employees appear to be relatively financially sophisticated and follow approaches consistent with economic and financial theory in terms of savings rates and investment strategies. However, there are also many less sophisticated employees who stick with plan default arrangements and/or follow simple rules of thumb in saving and investing. The challenge for corporate sponsors of pension plans is in designing arrangements and communication strategies that reduce the chances of these less sophisticated plan members making mistakes – in the sense of systematic deviations from optimal behaviour.

Keywords: Pensions; Defined Contribution; Contribution Rates; Investment Choice; Behavioural Biases

JEL Classification: G11; G23

Suggested Citation

Byrne, Alistair and Blake, David P. and Mannion, Graham, Pension Plan Decisions (September 1, 2009). Available at SSRN: or

Alistair Byrne (Contact Author)

University of Edinburgh - Business School ( email )

University of Edinburgh
29 Buccleuch Place
Edinburgh, EH8 9JS
United Kingdom

David P. Blake

City, University of London ( email )

106 Bunhill Row
London, EC1Y 8TZX
Great Britain
+44 (0) 20-7040-8600 (Phone)
+44 (0) 20-7040-8881 (Fax)


Graham Mannion

PensionDCisions ( email )

United Kingdom

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