Retirement Security in a Dc World: Using Behavioral Finance to Bridge the Expertise Gap

Published in Mitchell, O. and S. Utkus (Eds.) (2004). Pension Design and Structure: New Lessons from Behavioral Finance. Oxford, UK: Oxford University Press.

Pension Research Council WP2003-16

Posted: 9 Jan 2004 Last revised: 6 Apr 2020

Date Written: 2003

Abstract

This chapter evaluates models of participant choice in retirement plans, in the context of advisory services offered by their employers. We find that small barriers to accessing online advisory services seem to have significant impact on the likelihood of their use. We also find that by reducing the number of choices offered to participants from five to two greatly changes behavior. Depending on the decision, curtailing the number of choices changed participant investment choices by 40 to 100 percent.

Suggested Citation

Scott, Jason and Stein, Gregory, Retirement Security in a Dc World: Using Behavioral Finance to Bridge the Expertise Gap (2003). Published in Mitchell, O. and S. Utkus (Eds.) (2004). Pension Design and Structure: New Lessons from Behavioral Finance. Oxford, UK: Oxford University Press., Pension Research Council WP2003-16, Available at SSRN: https://ssrn.com/abstract=476024 or http://dx.doi.org/10.2139/ssrn.476024

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