TY - JOUR AU - Choi, James J AU - Laibson, David AU - Madrian, Brigitte C AU - Metrick, Andrew TI - Defined Contribution Pensions: Plan Rules, Participant Decisions, and the Path of Least Resistance JF - National Bureau of Economic Research Working Paper Series VL - No. 8655 PY - 2001 Y2 - December 2001 DO - 10.3386/w8655 UR - http://www.nber.org/papers/w8655 L1 - http://www.nber.org/papers/w8655.pdf N1 - Author contact info: James J. Choi Yale School of Management 165 Whitney Avenue P.O. Box 208200 New Haven, CT 06520-8200 E-Mail: james.choi@yale.edu David Laibson Department of Economics Littauer M-12 Harvard University Cambridge, MA 02138 Tel: 617/496-3402 Fax: 617/495-8570 E-Mail: dlaibson@gmail.com Brigitte C. Madrian 730 B N. Eldon Tanner Building Brigham Young University Provo, UT 84602-3113 Tel: 801-422-4248 E-Mail: brigitte_madrian@byu.edu Andrew Metrick Yale School of Management 135 Prospect Street P.O. Box 208200 New Haven, CT 06520 Tel: 203/432-3069 E-Mail: metrick@yale.edu AB - We assess the impact on savings behavior of several different 401(k) plan features, including automatic enrollment, automatic cash distributions, employer matching provisions, eligibility requirements, investment options, and financial education. We also present new survey evidence on individual savings adequacy. Many of our conclusions are based on an analysis of micro-level administrative data on the 401(k) savings behavior of employees in several large corporations that implemented changes in their 401(k) plan design. Our analysis identifies a key behavioral principle that should partially guide the design of 401(k) plans: employees often follow 'the path of least resistance.' For better or for worse, plan administrators can manipulate the path of least resistance to powerfully influence the savings and investment choices of their employees. ER -