Defined Contribution Pensions: Plan Rules, Participant Decisions, and the Path of Least Resistance

James Choi, David Laibson, Brigitte Madrian and Andrew Metrick

JCPR Working Papers from Northwestern University/University of Chicago Joint Center for Poverty Research

Abstract: We assess the impact on savings behavior of several different 401(k) plan features, including automatic enrollment, automatic cash distributions, employer matching provisions, eligibility requirements, investment options, and financial education. We also present new survey evidence on individual savings adequacy. Many of our conclusions are based on an analysis of micro-level administrative data on the 401(k) savings behavior of employees in several large corporations that implemented changes in their 401(k) plan design.Our analysis identifies a key behavioral principle that should partially guide the design of 401(k) plans: employees often follow "the path of least resistance." For better or for worse, plan administrators can manipulate the path of least resistance to powerfully influence the savings and investment choices of their employees.

Date: 2002-01-08
New Economics Papers: this item is included in nep-ias
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (152)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Working Paper: Defined Contribution Pensions: Plan Rules, Participant Decisions, and the Path of Least Resistance (2001)
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:wop:jopovw:257

Access Statistics for this paper

More papers in JCPR Working Papers from Northwestern University/University of Chicago Joint Center for Poverty Research Contact information at EDIRC.
Bibliographic data for series maintained by Thomas Krichel ().