Contributions to Defined Contribution Pension Plans

James Choi

No 21467, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Defined contribution (DC) pensions are an increasingly important means of financing retirement consumption. Because individuals often have substantial discretion over how much is contributed to their DC pension, studying DC contribution choices provides general insights into the determinants of individual economic decision-making. The literature has found strong deviations from many predictions of classical frictionless optimizing models. I provide an overview of the U.S. DC pension system and review the literature on the effect of matching contributions, automatic enrollment, active choice deadlines, choice overload, financial literacy, peer effects, mental accounting, and personal experience on individuals’ DC contributions.

JEL-codes: D14 J32 (search for similar items in EconPapers)
Date: 2015-08
New Economics Papers: this item is included in nep-age
Note: AG PE
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Citations: View citations in EconPapers (31)

Published as James J. Choi, 2015. "Contributions to Defined Contribution Pension Plans," Annual Review of Financial Economics, vol 7(1), pages 161-178.

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