Optimal default policies in defined contribution pension plans when employees are biased

Asen Ivanov

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 nonmonotone in the parameters in counterintuitive ways.

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Year of publication:	[2018]
Authors:	Ivanov, Asen
Publisher:	London : School of Economics and Finance, Queen Mary University of London
Subject:	optimal defaults \| libertarian paternalism \| nudging \| pension plan design \| Betriebliche Altersversorgung \| Occupational pension plan \| Pensionskasse \| Pension fund \| Altersvorsorge \| Retirement provision \| Sparen \| Savings \| Verhaltensökonomik \| Behavioral economics \| Theorie \| Theory

Extent:	1 Online-Ressource (circa 62 Seiten) Illustrationen
Series:	Working paper. - London : [Verlag nicht ermittelbar], ISSN 1473-0278, ZDB-ID 2666392-2. - Vol. no. 858 (April 2018)
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Graue Literatur ; Non-commercial literature ; Arbeitspapier ; Working Paper
Language:	English
Other identifiers:	hdl:10419/210415 [Handle]
Classification:	D14 - Personal Finance ; D91 - Intertemporal Consumer Choice; Life Cycle Models and Saving ; J26 - Retirement; Retirement Policies ; J32 - Nonwage Labor Costs and Benefits; Private Pensions
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10011845817