Retirement Savings: A Tale of Decisions and Defaults

Dobrescu, Loretti; Fan, Xiaodong; Bateman, Hazel; Newell, Ben R.; Ortmann, Andreas; Thorp, Susan

doi:10.2139/ssrn.2485189

Cited by 17 publications

(21 citation statements)

References 75 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Salary and Account Balance both had a positive association with being in all three calling groups and a negative association for the Not Called group. This is consistent with other evidence of non-default activity by members in a single-sector fund (Dobrescu et al 2018;Gerrans and Clark 2013). However, the magnitudes are small.…”

Section: Calling Behaviour: Marginal Effects-direction Of Influencesupporting

confidence: 91%

“…A lack of change does not imply disengagement from retirement savings (Bateman et al 2014) and instead may reflect a underlying trust in the plan's default choice or recognition of a lack of skill by members (Butt et al 2018). No matter the motive, this behaviour underscores the need to "carefully assess what default settings public policy and plan architects should encourage" (Dobrescu et al 2018(Dobrescu et al , 1078.…”

Section: Institutional Settingmentioning

confidence: 99%

See 1 more Smart Citation

Determinants of seeking advice within defined contribution retirement savings schemes

Clark

Fiaschetti

Gerrans

2018

Accounting & Finance

View full text Add to dashboard Cite

We report results from a study of superannuation member advice-seeking within their plan, explaining observed patterns by member age, gender, issue salience, and size-of-bet effect. Inquiry mode, frequency and volume of contact with the advice-provider, and sensitivity of members to legislative change and macroeconomic events are considered. Results show that gender (female more likely than male), age (older rather than younger), balance (larger rather than smaller) and experience (longer rather than shorter), are the strongest advice-seeking predictors, consistent over time. Findings suggest member engagement around retirement planning may be more effective when considering the factors affecting advice-seeking behaviour in general.

show abstract

Section: Calling Behaviour: Marginal Effects-direction Of Influencesupporting

confidence: 91%

Section: Institutional Settingmentioning

confidence: 99%

Determinants of seeking advice within defined contribution retirement savings schemes

Clark

Fiaschetti

Gerrans

2018

Accounting & Finance

View full text Add to dashboard Cite

show abstract

“…absent decision making by plan members is widespread, and it justifies numerous "nudges," usually in the form of contribution rates and asset allocations to which passive members "default" (Beshears et al 2009;Johnson et al 2012). Plan members are free to choose differently, yet very few do so (ANZ 2015; Commonwealth of Australia 2010; Dobrescu et al 2018). Evidence shows that it takes extreme default settings (Agnew and Szykman 2005), financial shocks (Gerrans 2012), or defaults that are obviously undesirable (Bronchetti et al 2011) to make people opt out.…”

mentioning

confidence: 99%

“…Retirement savings can be severely affected by this failure of members to make important choices. Insufficient engagement can lead to unsuitable investment strategies, excessive fees, or failure to capitalize on government or employer-provided opportunities (Choi, Laibson, and Madrian 2011;Dobrescu et al 2018;Mitchell et al 2006).…”

mentioning

confidence: 99%

Engagement with Retirement Savings: It Is a Matter of Trust

Deetlefs¹,

Bateman²,

Dobrescu³

et al. 2018

Journal of Consumer Affairs

Self Cite

View full text Add to dashboard Cite

People who engage with their retirement savings are more likely to opt out of unsuitable defaults. We use cluster analysis of matched survey and administrative data to identify groups of pension plan members that are alike in their attitudes toward retirement saving. We find that engaged and disengaged members segregate into groups based on their interest and trust. Group membership in turn helps predict plan engagement, as proxied by nondefault choices. Specifically, engagement is stronger among interested groups. Trust, however, has a more complex relationship with engagement, particularly as it interacts with interest. While members with low interest and high trust are less likely to engage (e.g., by not checking plan performance), less trusting members engage more (e.g., by actively choosing asset allocations). As interest and trust successfully determine group membership, and ultimately engagement, pension plan providers should address members' diverse needs and circumstances with personalized approaches.

show abstract

“…UniSuper is the one of Australia's largest pension schemes with 460,000 members and is open to all employees in the higher education and research sectors(Dobrescu et al (2017)). 15 In this case, the method simply minimises the sum across the k groups of the sum of squared differences between each observation in each group and the mean of that group.…”

mentioning

confidence: 99%

Grouping Individual Investment Preferences in Retirement Savings: A Cluster Analysis of a USS Members Risk Attitude Survey.

Blake

Duffield²,

Tonks

et al. 2020

SSRN Journal

View full text Add to dashboard Cite

Cluster analysis is used to identify homogeneous groups of members of USS in terms of risk attitudes. There are two distinct clusters of members in their 40s and 50s. One had previously 'engaged' with USS by making additional voluntary contributions. It typically had higher pay, longer tenure, less interest in ethical investing, lower risk capacity, a higher percentage of males, and a higher percentage of academics than members of the 'disengaged' cluster. Conditioning only on the attitude to risk responses, there are 18 clusters, with similar but not identical membership, depending on which clustering method is used. The differences in risk aversion across the 18 clusters could be explained largely by differences in the percentage of females and the percentage of couples. Risk aversion increases as the percentage of females in the cluster increases, while it reduces as the percentage of couples increases because of greater risk sharing within the household. Characteristics that other studies have found important determinants of risk attitudes, such as age, income and (pension) wealth, do not turn out to be as significant for USS members. Further, despite being on average more highly educated than the general population, USS members are marginally more risk averse than the general population, controlling for salary, although the difference is not significant.

show abstract

Retirement Savings: A Tale of Decisions and Defaults

Cited by 17 publications

References 75 publications

Determinants of seeking advice within defined contribution retirement savings schemes

Determinants of seeking advice within defined contribution retirement savings schemes

Engagement with Retirement Savings: It Is a Matter of Trust

Grouping Individual Investment Preferences in Retirement Savings: A Cluster Analysis of a USS Members Risk Attitude Survey.

Contact Info

Product

Resources

About