Following the recession in the early 2000s, U.S. corporate and public defined benefit (DB) plans faced unprecedented uncertainty with respect to their funding requirements going forward. Just as capital market performance started helping plan sponsors improve the health of their DB plans, the...

Two issues may have a tremendous impact on the adequacy of retirement income for today's workers: The growth of 401(k) pension plans and the possible privatization of Social Security. Workers are becoming increasingly responsible for the adequacy of their retirement income by determining how...

Are defined contribution (DC) pension funds' capital flows sensitive to performance? We examine pressures from individual account holders who can switch their pension managers. Using novel data on retirement accounts for nearly 10 million individuals, we analyze switching behavior based on the...

We show that participants are influenced by their coworkers when they make equity investment decisions. Using a rich dataset of 401(k) plans, we find that individuals are likely to increase (decrease) their risky share when they have lower (higher) equity exposure than their coworkers in the...

We show that participants are influenced by their coworkers when they make equity investment decisions. Using a rich dataset of 401(k) plans, we find that individuals are likely to increase (decrease) their risky share when they have lower (higher) equity exposure than their coworkers in the...

Current demographic dynamics driven by low fertility and increasing longevity requires adjustments of the traditional frameworks of providing pensions. In this article we highlight three crucial issues policymakers should address by implementing those adjustments. First, fiscal limitations given...

Assuming loss aversion, stochastic investment and labor income processes, and a path-dependent target fund, we show that the optimal investment strategy for defined contribution pension plan members is a target-driven 'threshold' strategy. With this strategy, the equity allocation is increased...