Public sector defined benefit pension plans are based on final earnings. As such, these plans are back-loaded; those with long careers receive substantial benefits and those who leave early receive little. The analysis consists of three parts. The first section discusses the design of state and...

Financial advice tends to focus on financial assets, but other levers may be more important for most households. This paper proceeds in three stages. The first section reports a simple Excel spreadsheet exercise that provides a stylized example of the tradeoff between returns and time spent in...

The maturation of the 401(k) system and the enactment of the Pension Protection Act of 2006, which made 401(k) plans easier and more automatic, were expected to enhance the role that 401(k)s played in the provision of retirement income. So, originally, the release of the Federal Reserve's 2007...

In 2010, the U.S. Department of Labor proposed changes that would eliminate third-party incentive payments, such as 12b-1 fees, that may encourage broker-dealers to sell high-fee mutual funds to Individual Retirement Account (IRA) customers. The investment industry argues that eliminating these...

To better understand the challenges of the 401(k) system and its coverage and to assess possible strategies to improve it, this report presents a three-part analysis. The first part focuses on 401(k)s and documents the extent and nature of portability, the flow of money to IRAs, and leakage from...

Multiemployer pension plans, like other employer plans, have been challenged by two financial crises since 2000. The majority of multiemployer plans are returning to financial health, but a substantial minority face serious funding problems that are exacerbated by unique structural challenges in...

Although annuities would ensure higher levels of lifetime income, reduce the likelihood that people will outlive their resources, and alleviate some of the anxiety associated with post-retirement investing, the market for annuity products is minuscule. Explanations for the low demand include the...