The growth of participant direction in defined contribution plans

Arbeitspapier

Since 1990, most pension plans have shifted the responsibility for directing pension assets to the employee. This study summarizes some of the possible explanations for this rapid shift toward participant direction and uses IRS Form 5500 data to investigate the effect of worker and plan characteristics on the likelihood of making a switch. The study also estimates the effect of a switch to participant direction on employee contribution and asset allocation behavior. The analysis reveals that collective bargaining and pension investments in employer stock reduce the chance of a switch to participant direction, whereas below average return performance increases the chance. Also, a switch to participant direction increases employee contributions to the pension and reduces the share of assets invested in employer securities.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 4088

Classification and Topics

• Classification: Wirtschaft ; Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
• Subject: Participant direction ; pensions ; employer stock ; Betriebliche Altersversorgung ; Pensionsfonds ; Arbeitnehmerbeteiligung ; Anlageverhalten ; USA

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Even, William E. ; Macpherson, David A.
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/35554
• URN: urn:nbn:de:101:1-20090330256
• Last update: 10.03.2025, 11:42 AM CET