Wharton Pension Research Council Working Papers


Fees, Framing, and Financial Literacy in the Choice of Pension Manager

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Working Paper

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A growing literature shows how consumers make mistakes in a variety of different settings pertinent to financial decision-making. Using data from a randomized experiment in Chile, we show how different ways of presenting pension management fees shape consumer choices, and how responses to pension fee information varies by level of financial literacy. Our results indicate that, in choosing pension funds, those with lower levels of education, income, and financial literacy rely more on employers, friends, and coworkers, than on fundamentals. We also find that such individuals are more responsive to information framing when interpreting the relative benefits of different investment choices.


The published version of this Working Paper may be found in the 2011 publication: Financial Literacy: Implications for Retirement Security and the Financial Marketplace.

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Copyright/Permission Statement

Opinions and errors are solely those of the authors and not of the institutions providing funding for or with which the authors are affiliated. ©2010 Hasting, Mitchell, and Chyn. All rights reserved.


This research is part of the NBER programs on Aging and Labor Economics, and it was supported by grants from the US Social Security Administration (SSA) to the Michigan Retirement Research Center (MRRC) and the TIAA-CREF Institute, as well as the Boettner Center/Pension Research Council at The Wharton School and Yale Institution for Social and Policy Studies. The authors also acknowledge support from and NIH/NIA grant AG023774-01, NIH/NIA Grant # P30 AG12836, and NIH/NICHC Population Research Infrastructure Program R24 HD-044964, all at the University of Pennsylvania. The authors thank David Bravo, Fabian Duarte, Raissa Faibregas, Peter Frerichs, Daniela Fuentes, Carolina Orellana, Sandra Quijada, and Javiera Vasquez for helpful comments.



Date Posted: 07 August 2019