The Impact of Employer Defaults and Match Rates on Retirement Saving

20 Pages Posted: 27 Dec 2021

See all articles by David Blanchett

David Blanchett


Michael S. Finke

The American College

Zhikun Liu

Employee Benefit Research Institute

Date Written: December 24, 2021


This study evaluates the interaction between employer match and default rates on savings outcomes among new employees. Selecting a higher default rate has the largest impact on employee savings rates. Plans with low default rates that match a high percentage of employee earnings induce higher-income participants to actively move away from the low default savings rate, resulting in a wider savings gap between higher- and lower-income employees. When default savings rates are set higher, fewer employees move away from the default resulting in higher and more equal savings rates. Additionally, we find evidence that higher default savings rates increase usage of plan default investments.

Keywords: Defaults, defined contribution, retirement, employer match

JEL Classification: J26,D12,D14

Suggested Citation

Blanchett, David and Finke, Michael S. and Liu, Zhikun, The Impact of Employer Defaults and Match Rates on Retirement Saving (December 24, 2021). Available at SSRN: or

David Blanchett

PGIM ( email )

Two Gateway Center
Sixth Floor
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859-492-5637 (Phone)


Michael S. Finke (Contact Author)

The American College ( email )

Bryn Mawr, PA 19010
United States

Zhikun Liu

Employee Benefit Research Institute ( email )

1100 13th Street, NW
Suite 878
Washington, DC 20005-4204
United States

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