TY  - JOUR
AU  - Mitchell,Olivia S.
AU  - Utkus,Stephen
TI  - Target-Date Funds in 401(k) Retirement Plans
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 17911
PY  - 2012
Y2  - March 2012
UR  - http://www.nber.org/papers/w17911
L1  - http://www.nber.org/papers/w17911.pdf
N1  - Author contact info:
Olivia S. Mitchell
University of Pennsylvania
Wharton School
3620 Locust Walk, St 3000 SH-DH
Philadelphia, PA 19104-6302
Tel: 215-898-0424
Fax: 215/898-0310
E-Mail: mitchelo@wharton.upenn.edu

Stephen Utkus
Vanguard Center for Retirement Research
100 Vanguard Boulevard, M38
Malvern, PA  19355
E-Mail: steve_utkus@vanguard.com
AB  - Individual responsibility for portfolio construction is a central theme for defined contribution pensions, yet the rise of target-date funds is shifting investment decisions from workers back to employers. A complex choice architecture including automatic enrollment, reenrollment, and fund mapping, is increasing the number of participants defaulting into employer-selected target-date funds. At the same time, portfolios of non-defaulted participants undergo sizeable changes, with equity share ratios widening by over 40 percent points between younger/older participants. Among active decision-makers, these funds act as a form of implicit employer-provided lifecycle investment advice.  More broadly, our findings highlight malleable preferences among retirement investors and a demand for default-based guidance or simplified advice for households facing complex choices.
ER  -