Digital enrollment architecture and retirement savings decisions: Evidence from the field

Rick Mason

Research output: ThesisDoctoral ThesisScientific

3 Downloads (Pure)

Abstract

Increasingly, U.S. employees are being asked to assume responsibility for saving for retirement through employer-sponsored 401(k) retirement plans. Unfortunately, a large share of Americans are under-saving, and expected to be unprepared for retirement. Recent work from behavioral scientists provides evidence that choice architecture and default effects can play a powerful role in improving retirement savings choices. Despite employees’ frequent use of digital devices to make initial enrollment decisions, there is a comparative lack of evidence regarding the impacts of digital design interfaces on retirement choices. This thesis presents new evidence from three large-scale field studies which document how employees respond to aggressive plan defaults, and small scale changes to the design of online enrollment interfaces. Chapter 1 presents evidence that aggressively set defaults (7% to 10%) result in increased contribution rates, without decreasing employee enrollment, relative to conventional (6%) default rates. Chapter 2 documents that higher planned escalator rates (of 2% or 3%) increase contribution rates, without adversely impacting enrollment. Finally, Chapter 3 presents evidence that employees’ initial enrollment decisions may be heavily influenced by non-economic features, including the use of visual elements like color, the standardization of language, and the salience of previously disclosed plan details. The studies in this thesis identify three distinct strategies that policymakers and employers can use to encourage higher savings.
Original languageEnglish
QualificationDoctor of Philosophy
Awarding Institution
  • Tilburg University
Supervisors/Advisors
  • Potters, Jan, Promotor
  • Thomas, Stephe , Promotor, External person
Award date5 Nov 2019
Place of PublicationTilburg
Publisher
Print ISBNs978 90 5668 608 6
Publication statusPublished - 2019
Externally publishedYes

Fingerprint

Retirement saving
Enrollment
Employees
Retirement
Contribution rate
Employers
Politicians
Interface design
Field study
Standardization
401(k)
Language
Responsibility
Savings
Default rate

Cite this

Mason, R. (2019). Digital enrollment architecture and retirement savings decisions: Evidence from the field. Tilburg: CentER, Center for Economic Research.
Mason, Rick. / Digital enrollment architecture and retirement savings decisions: Evidence from the field. Tilburg : CentER, Center for Economic Research, 2019. 178 p.
@phdthesis{58639618e34e4b5c8c8cabb4c6c286bb,
title = "Digital enrollment architecture and retirement savings decisions: Evidence from the field",
abstract = "Increasingly, U.S. employees are being asked to assume responsibility for saving for retirement through employer-sponsored 401(k) retirement plans. Unfortunately, a large share of Americans are under-saving, and expected to be unprepared for retirement. Recent work from behavioral scientists provides evidence that choice architecture and default effects can play a powerful role in improving retirement savings choices. Despite employees’ frequent use of digital devices to make initial enrollment decisions, there is a comparative lack of evidence regarding the impacts of digital design interfaces on retirement choices. This thesis presents new evidence from three large-scale field studies which document how employees respond to aggressive plan defaults, and small scale changes to the design of online enrollment interfaces. Chapter 1 presents evidence that aggressively set defaults (7{\%} to 10{\%}) result in increased contribution rates, without decreasing employee enrollment, relative to conventional (6{\%}) default rates. Chapter 2 documents that higher planned escalator rates (of 2{\%} or 3{\%}) increase contribution rates, without adversely impacting enrollment. Finally, Chapter 3 presents evidence that employees’ initial enrollment decisions may be heavily influenced by non-economic features, including the use of visual elements like color, the standardization of language, and the salience of previously disclosed plan details. The studies in this thesis identify three distinct strategies that policymakers and employers can use to encourage higher savings.",
author = "Rick Mason",
note = "CentER Dissertation Series Volume: 607",
year = "2019",
language = "English",
isbn = "978 90 5668 608 6",
volume = "607",
series = "CentER Dissertation Series",
publisher = "CentER, Center for Economic Research",
school = "Tilburg University",

}

Mason, R 2019, 'Digital enrollment architecture and retirement savings decisions: Evidence from the field', Doctor of Philosophy, Tilburg University, Tilburg.

Digital enrollment architecture and retirement savings decisions: Evidence from the field. / Mason, Rick.

Tilburg : CentER, Center for Economic Research, 2019. 178 p.

Research output: ThesisDoctoral ThesisScientific

TY - THES

T1 - Digital enrollment architecture and retirement savings decisions: Evidence from the field

AU - Mason, Rick

N1 - CentER Dissertation Series Volume: 607

PY - 2019

Y1 - 2019

N2 - Increasingly, U.S. employees are being asked to assume responsibility for saving for retirement through employer-sponsored 401(k) retirement plans. Unfortunately, a large share of Americans are under-saving, and expected to be unprepared for retirement. Recent work from behavioral scientists provides evidence that choice architecture and default effects can play a powerful role in improving retirement savings choices. Despite employees’ frequent use of digital devices to make initial enrollment decisions, there is a comparative lack of evidence regarding the impacts of digital design interfaces on retirement choices. This thesis presents new evidence from three large-scale field studies which document how employees respond to aggressive plan defaults, and small scale changes to the design of online enrollment interfaces. Chapter 1 presents evidence that aggressively set defaults (7% to 10%) result in increased contribution rates, without decreasing employee enrollment, relative to conventional (6%) default rates. Chapter 2 documents that higher planned escalator rates (of 2% or 3%) increase contribution rates, without adversely impacting enrollment. Finally, Chapter 3 presents evidence that employees’ initial enrollment decisions may be heavily influenced by non-economic features, including the use of visual elements like color, the standardization of language, and the salience of previously disclosed plan details. The studies in this thesis identify three distinct strategies that policymakers and employers can use to encourage higher savings.

AB - Increasingly, U.S. employees are being asked to assume responsibility for saving for retirement through employer-sponsored 401(k) retirement plans. Unfortunately, a large share of Americans are under-saving, and expected to be unprepared for retirement. Recent work from behavioral scientists provides evidence that choice architecture and default effects can play a powerful role in improving retirement savings choices. Despite employees’ frequent use of digital devices to make initial enrollment decisions, there is a comparative lack of evidence regarding the impacts of digital design interfaces on retirement choices. This thesis presents new evidence from three large-scale field studies which document how employees respond to aggressive plan defaults, and small scale changes to the design of online enrollment interfaces. Chapter 1 presents evidence that aggressively set defaults (7% to 10%) result in increased contribution rates, without decreasing employee enrollment, relative to conventional (6%) default rates. Chapter 2 documents that higher planned escalator rates (of 2% or 3%) increase contribution rates, without adversely impacting enrollment. Finally, Chapter 3 presents evidence that employees’ initial enrollment decisions may be heavily influenced by non-economic features, including the use of visual elements like color, the standardization of language, and the salience of previously disclosed plan details. The studies in this thesis identify three distinct strategies that policymakers and employers can use to encourage higher savings.

M3 - Doctoral Thesis

SN - 978 90 5668 608 6

VL - 607

T3 - CentER Dissertation Series

PB - CentER, Center for Economic Research

CY - Tilburg

ER -

Mason R. Digital enrollment architecture and retirement savings decisions: Evidence from the field. Tilburg: CentER, Center for Economic Research, 2019. 178 p. (CentER Dissertation Series).