TY  - JOUR
AU  - Pool,Veronika K.
AU  - Sialm,Clemens
AU  - Stefanescu,Irina
TI  - It Pays to Set the Menu: Mutual Fund Investment Options in 401(k) Plans
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 18764
PY  - 2013
Y2  - February 2013
UR  - http://www.nber.org/papers/w18764
L1  - http://www.nber.org/papers/w18764.pdf
N1  - Author contact info:
Veronika K. Pool
Kelley School of Business
Indiana University
1309 E 10th Street
Bloomington, IN 47405
E-Mail: vkpool@indiana.edu

Clemens Sialm
University of Texas at Austin
McCombs School of Business
1 University Station; B6600
Austin, TX 78712
Tel: 512-232-6835
E-Mail: clemens.sialm@mccombs.utexas.edu

Irina Stefanescu
Kelley School of Business
Indiana University
1309 E. Tenth Street
Bloomington, IN 47405
E-Mail: stefanei@indiana.edu
AB  - This paper investigates whether mutual fund families acting as trustees of 401(k) plans display favoritism toward their own funds. Using a hand-collected dataset on retirement investment options, we show that poorly-performing funds are less likely to be removed from and more likely to be added to a 401(k) menu if they are affiliated with the plan trustee. We find no evidence that plan participants undo this affiliation bias through their investment choices. Finally, the subsequent performance of poorly-performing affiliated funds indicates that these trustee decisions are not information driven and are costly to retirement savers.
ER  -