Optimal Default Policies in Defined Contribution Pension Plans when Employees are Biased

Asen Ivanov ()

No 858, Working Papers from Queen Mary University of London, School of Economics and Finance

Abstract: This paper analyses a model in which employees are biased in their perception of their optimal contribution rates or asset allocations in defined contribution pension plans. The optimal default is characterised as a function of the parameters. It is shown that, for some values of the parameters, forcing employees to actively decide is the optimal default policy. The total loss in the population at the optimal default policy can be non-monotone in the parameters in counterintuitive ways.

Keywords: optimal defaults; libertarian paternalism; nudging; pension plan design (search for similar items in EconPapers)
JEL-codes: D14 D91 J26 J32 (search for similar items in EconPapers)
Date: 2018-04-27
New Economics Papers: this item is included in nep-age, nep-lma and nep-rmg
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.qmul.ac.uk/sef/media/econ/research/workingpapers/2018/wp858.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:qmw:qmwecw:858

Access Statistics for this paper

More papers in Working Papers from Queen Mary University of London, School of Economics and Finance Contact information at EDIRC.
Bibliographic data for series maintained by Nicholas Owen ( this e-mail address is bad, please contact ).