A comparison of the performances of pension products that ignores long-term trends might significantly overestimate the long-term impact of volatility risks while underestimating the impact of persistent, low-frequency trends. This paper proposes a comparison making use of projection models based on the long-term risk–return tradeoff proposed by Campbell and Viceira (2005) to explicitly take into account slow-moving economic trends. In order to illustrate the approach and its implications, we discuss the capital protection provided by life-cycle target-date fund strategies and minimum guarantee strategies.

In 2015, the U.S. Treasury Department launched myRA, a no-fee retirement account designed for people who lacked employer-sponsored retirement options. We report findings from two behavioral field experiments intended to motivate interest in using the tax refund to open and fund myRAs directly through the tax-filing process. These experiments, administered to more than 100,000 low-income tax filers in 2016, embedded persuasive messages in emails sent to filers and directly within online tax-filing software. We find that interest in myRA was generally very low, although interest and enrollment intentions varied depending on the framing of the program's benefits.

Retirement scholars (and policy makers) have traditionally assumed spouses share their retirement savings, even when they are financially heterogamous and their individual saving capacities diverge. Recent research, however, has challenged this assumption, emphasising that wealth is unequally distributed within couples. In this study, we contribute to this debate by exploring how often financially heterogamous spouses describe their management of retirement savings as joint and redistributive. Data collected in Québec (Canada) in 2015 show that 28 per cent of couples with an income differential report to balance retirement savings across partners. Building on exchange and institutional theories of conjugal behaviour, we also stress that the prevalence of this practice varies with several factors, including union duration and matrimonial status. These findings suggest policy makers underestimate the size of the population at risk of old age financial vulnerability when assuming lower-income individuals are well prepared for retirement if partnered with a better-off spouse who saves.

We explore the relationships between financial trust and behaviors, attitudes, knowledge, and preferences related to utilizing professional financial advice. Using survey data from the RAND American Life Panel, we find that financial trust is correlated with advice usage and likelihood of seeking advisory services. Leveraging an experiment that randomized provision of and access to advice, we find that trust is an important predictor of who chooses to receive advice, even after controlling for demographic characteristics and financial literacy. However, providing unsolicited advice has little impact on behavior, even for individuals with high levels of trust.

Automatic enrollment has substantially increased employee participation in defined contribution plans. Yet little is known about how retirement plan design features influence retirement wealth accumulation in a setting of labor market turnover. We find that employees separating from jobs with automatic enrollment plans are significantly more likely to take a cash distribution (and potentially pay a tax penalty) than those separating from jobs with voluntary enrollment plans, offsetting some of the benefits from automatic enrollment. Yet given the sizeable improvements in plan participation from automatic enrollment, wealth accumulation for automatically enrolled participants, net of cash-outs and penalties, remain higher than it would have been under voluntary enrollment.

Using longitudinal Survey of Income and Program Participation data linked to Social Security Administration administrative records from 2009 and 2012, we find negative economic shocks cause 401(k) contribution behavior to react in ways consistent with reactions to fear and past trauma. If employees participating in 401(k) plans did not experience real earnings declines or unemployment spells between 2009 and 2012, then their contribution rates would have been 5% higher and each person would have contributed US $193 more toward their defined contribution plan accounts. We conclude that previous studies may have swung too far in emphasizing inertia as a primary behavior trait explaining workers’ 401(k) plan engagement. Reactive behavior to protect living standards by reducing retirement savings is also important.

Unlike private sector employers, public school districts generally offer more than one type of supplemental retirement savings plan and allow multiple vendors to offer products. Using individual-level payroll data from over half of the public school districts in North Carolina coupled with data from an employer survey, this study examines how inter-district differences in supplemental plan administration are related to participation in these savings vehicles. We find wide variation in total participation rates and in 403(b) plan participation rates in particular, even among this population of public-sector workers with the same defined benefit pension plan, health plan, and retiree health coverage. Individual and district characteristics explain some, but not all, of the variation observed.

To contribute to a retirement plan (barring an increase in income), an individual must either reduce consumption or increase debt. Using data from the 2004 wave of the Survey of Income and Program Participation, we examine the extent to which contributing to 401(k)-type accounts leads to an increase in short-term financial difficulties, particularly among low-income individuals. After instrumenting for plan take-up, we find that contributing to a 401(k) plan appears to have a small positive impact on the presence of any material hardship and debt holding among the lowest income quintiles, though that effect diminishes further up the income distribution.

We develop a generalisation of the World Bank (1994) model of forced saving for retirement. This broader model consists of two tiers of second pillar savings – mandated and non-mandated (voluntary). Furthermore, the government can set two types of guarantees on the first (mandated) tier – investment returns and annuity prices – leading to possible cross-subsidisation between the tiers. This has the potential to induce social redistribution, foster a liquid private market for life annuities, and obviate some of the investment risk and annuity price risk that retirees face.

We formulate a quantitative model of financial flows within such a system, which explains the mechanism by which cross-subsidisation occurs. Based on this analysis, a taxonomy of two-tiered retirement systems is presented, that is based on the choices that the government makes.

We report analysis of voluntary switching from defined benefit (DB) to defined contribution (DC) plans in an environment best characterised as benign. Using a large Australian fund database we identify socio-demographic correlates and the macroeconomic circumstances associated with DB to DC switching. The age of participants is an important correlate of switching behaviour, suggesting a degree of risk tolerance previously not recognised in the literature. It is also noted, however, that this type of switching behaviour may involve secondary behaviour such that uncertainties of DC investment performance are managed by reference to an asset allocation formula that maps to the previous DB investment strategy.