Defined Contribution Pension Plans: Sticky or Discerning Money? / Clemens Sialm, Laura Starks, Hanjiang Zhang.

Format:

Book

Author/Creator:

Sialm, Clemens.

Contributor:

National Bureau of Economic Research.

Starks, Laura.

Zhang, Hanjiang.

Series:

Working Paper Series (National Bureau of Economic Research) no. w19569.

NBER working paper series no. w19569

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Defined Contribution Pension Plans

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2013.

Summary:

Participants in defined contribution (DC) retirement plans rarely adjust their portfolio allocations, suggesting that their investment choices and consequent money flows are sticky and not discerning. Yet, the participants' inertia could be offset by the DC plan sponsors, who adjust the plan's investment options. We examine these countervailing influences on flows into U.S. mutual funds. We find that flows into funds that derive from DC assets are more volatile and exhibit more performance sensitivity than non-DC flows, primarily due to the adjustments of the investment options by the plan sponsors. Thus, DC retirement money is less sticky and more discerning.

Notes:

Print version record

October 2013.