The Pension Research Council
Book Title

Pension Design and Structure: New Lessons from Behavioral Finance

Chapter Eleven: Retirement Security in a DC World: Using Behavioral Finance to Bridge The Expertise Gap
Jason Scott and Gregory Stein
0-19-927339-1-11

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Abstract — This chapter evaluates models of participant choice in retirement plans, in the context of advisory services offered by their employers. We find that small barriers to accessing online advisory services seem to have significant impact on the likelihood of their use. We also find that by reducing the number of choices offered to participants from five to two greatly changes behavior. Depending on the decision, curtailing the number of choices changed participant investment choices by 40 to 100 percent.