Lu, Timothy (Jun)

Email Address
ORCID
Disciplines
Research Projects
Organizational Units
Position
Introduction
Research Interests

Filters

2008 - 20092
2
2
Reset filters

Settings

Author: Tang, Ning ×

Search Results

Now showing 1 - 2 of 2
  • Publication
    The Efficiency of Pension Plan Investment Menus: Investment Choices in Defined Contribution Pension Plans
    (2008-06-01) Tang, Ning; Mitchell, Olivia S
    Few previous studies have explored whether defined contribution retirement saving plans offer sufficiently diversified investment menus, though it is likely that these menus significantly shape workers’ accumulations of retirement wealth. This paper assesses the efficiency and performance of 401(k) investment options offered by a large group of US employers. We show that most plans are efficient compared to market benchmark indexes. Three performance measures underscore the fact that these plans tend to offer a sensible investment menu, when measured in terms of the menus’ mean-variance efficiency, diversification, and participant utility. The key factor contributing to plan efficiency and performance has to do with the types of funds offered, rather than the total number of investment options provided.
  • Publication
    The Efficiency of Sponsor and Participant Portfolio Choices in 401(k) Plans
    (2009-08-01) Tang, Ning; Mitchell, Olivia S; Mottola, Gary R; Utkus, Stephen P
    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 help. Also, in sponsors’ design of 401(k) menus, the number of options offered is less important than the range of funds provided.