It Pays to Set the Menu: Mutual Fund Investment Options in 401(k) plans

Veronika K. Pool (), Clemens Sialm and Irina Stefanescu
Additional contact information
Veronika K. Pool: https://business.vanderbilt.edu/bio/veronika-pool/
Irina Stefanescu: https://www.federalreserve.gov/econres/irina-stefanescu.htm

No 2014-96, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: This paper investigates whether mutual fund families acting as service providers in 401(k) plans display favoritism toward their own funds. Using a hand-collected dataset on retirement investment options, we show that poorly-performing funds are less likely to be removed from and more likely to be added to a 401(k) menu if they are affiliated with the plan trustee. We find no evidence that plan participants undo this affiliation bias through their investment choices. Finally, the subsequent performance of poorly-performing affiliated funds indicates that these trustee decisions are not information driven.

Keywords: 401(k) pension plans; mutual funds; favoritism (search for similar items in EconPapers)
Pages: 71 pages
Date: 2014-08-27
New Economics Papers: this item is included in nep-age
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.federalreserve.gov/econresdata/feds/2014/files/201496pap.pdf Full text (application/pdf)

Related works:
Journal Article: It Pays to Set the Menu: Mutual Fund Investment Options in 401(k) Plans (2016)
Working Paper: It Pays to Set the Menu: Mutual Fund Investment Options in 401(k) Plans (2014)
Working Paper: It Pays to Set the Menu: Mutual Fund Investment Options in 401(k) Plans (2013)
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:fip:fedgfe:2014-96

Access Statistics for this paper

More papers in Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.) Contact information at EDIRC.
Bibliographic data for series maintained by Ryan Wolfslayer ; Keisha Fournillier ().