Key Findings Details
The Efficiency of Pension Menus and Individual Portfolio Choice in 401(k) Pensions
Ning Tang, Olivia S. Mitchell, Gary R. Mottola and Stephen P. Utkus
- Most 401(k) plans offer efficient investment menus, measured by plan performance and diversification, when compared to market benchmarks.
- We found that 401(k) plan participants had higher return losses and assumed greater risks than if they had used a naive allocation strategy.
- Poor investment decisions accounted for over three-quarters of the total losses sustained in the average portfolio.
- Fund sponsors should offer financial investment advice to help plan participants realize better returns.