Gary Mottola

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org
Institutional Affiliation: Financial Industry Regulatory Authority

NBER Working Papers and Publications

September 2009The Efficiency of Sponsor and Participant Portfolio Choices in 401(k) Plans
with Ning Tang, Olivia S. Mitchell, Stephen Utkus: w15317
Portfolio performance in 401(k) plans depends on both the investment menu made available by plan sponsors and participants portfolio decisions. We use a unique dataset of nearly 1 million participants in one thousand pension plans to identify key portfolio inefficiencies in 401(k) plans,attributing them either to the sponsor's menu design or to participants' own portfolio choices. We show that most sponsors offer efficient investment menus. However, many participants fail to construct efficient portfolios, leading to retirement wealth that could be one-fifth lower due to poor portfolio decisions. Because participants are the main source of inefficient DC portfolio choices, strategies targeting their portfolio choices, such as improved default investment strategies or advice programs, may h...

Published: Ning Tang & Olivia S. Mitchell & Gary R. Mottola & Stephen P. Utkus, 2010. "The efficiency of sponsor and participant portfolio choices in 401(k) plans," Journal of Public Economics, vol 94(11-12), pages 1073-1085.

June 2009Default, Framing and Spillover Effects: The Case of Lifecycle Funds in 401(k) Plans
with Olivia S. Mitchell, Stephen P. Utkus, Takeshi Yamaguchi: w15108
Important behavioral factors such as default and framing effects are increasingly being employed to optimize decision-making in a variety of settings, including individually-directed retirement plans. Yet such approaches may have unintended "spillover" effects, as we show with regard to the introduction of lifecycle funds in U.S. 401(k) plans. As anticipated, lifecycle funds do reshape individual portfolio choices through large default and framing effects. But unexpectedly, they also create a new class of investors which holds these funds as part of more complex portfolios. Our results are directly relevant to those interested in retirement plan design and retirement security; they also highlight the importance of assessing such spillover effects in other consequential settings where behav...
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us