Two academics from the Wharton School of Business have produced a paper suggesting one large plan's effort to streamline its defined contribution plan created potential savings of $20.2 million for participants over a 20-year period, or $9,400 per participant.

Previous research has been mixed on how the number of lineup options influences participant behavior and outcomes, but none of that research has examined how participants react to a substantial reduction in options, claim Donald Keim and Olivia Mitchell in the paper, prepared for Wharton's Pension Research Council.

Before 2013, the studied plan, a large nonprofit "research and teaching institution," offered almost 90 mutual fund options, ranging from equity to target-date funds, to bond index funds, REITs and commodity funds.

Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.

Your access to unlimited BenefitsPRO content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Nick Thornton

Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.