Woodrow T. Johnson

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NBER Working Papers and Publications

November 2012The Effect of Pension Design on Employer Costs and Employee Retirement Choices: Evidence from Oregon
with John Chalmers, Jonathan Reuter: w18517
Oregon's Public Employees Retirement System (PERS) is a rich setting in which to study the effect of pension design on employer costs and employee retirement-timing decisions. PERS pays retirees the maximum benefit calculated using three formulas that can be characterized as defined benefit (DB), defined contribution (DC), and a combination of DB and DC. From the employer's perspective, we show that this "maximum benefit" calculation is costly. Average ex post retirement benefits are 54% higher than they if had been calculated using only the DB formula. Monte Carlo simulations verify that the higher cost could have been predicted at the start of our sample period. From the employee's perspective, we show that plan design distorts the retirement-timing decision: employees receiving DC benef...


August 2012The Effect of Pension Design on Employer Costs and Employee Retirement Choices: Evidence from Oregon
with John Chalmers, Jonathan Reuter
in Retirement Benefits for State and Local Employees: Designing Pension Plans for the Twenty-First Century, Robert Clark, Joshua Rauh, and Mark Duggan, editors
March 2008Taxes and Mutual Fund Inflows Around Distribution Dates
with James M. Poterba: w13884
Capital gain distributions by mutual funds generate tax liability for taxable shareholders, thereby reducing their after-tax returns. Taxable investors who are considering purchasing fund shares around distribution dates have an incentive to delay their purchase until after the distribution, since this will reduce the present value of their tax liability. Non-taxable shareholders, such as those who invest through IRAs and other tax-deferred accounts, face no such incentive for delaying purchase. This paper compares daily shareholder transactions by taxable and non-taxable investors in the mutual funds of a single no-load fund complex around distribution dates. Gross inflows to taxable accounts are significantly lower in the weeks preceding distribution dates than in the weeks following...
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