Wharton Pension Research Council Working Papers

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Working Paper

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The complexity of the retirement savings decision may overwhelm employees, encouraging procrastination and reducing 401(k) enrollment rates. We study a low-cost manipulation designed to simplify the 401(k) enrollment process. Employees are given the option to make a Quick Enrollment™ election to enroll in their 401(k) plan at a pre-selected contribution rate and asset allocation. By decoupling the participation decision from the savings rate and asset allocation decisions, the Quick Enrollment™ mechanism simplifies the savings plan decision process. We find that at one company, Quick Enrollment™ tripled 401(k) participation rates among new employees three months after hire. When Quick Enrollment™ was offered to previously hired non-participating employees at two firms, participation increased by 10 to 20 percentage points among those employees affected.

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Copyright/Permission Statement

All findings, interpretations, and conclusions of this paper represent the views of the author(s) and not those of the Wharton School or the Pension Research Council. Copyright 2006 © Pension Research Council of the Wharton School of the University of Pennsylvania. All rights reserved.


We thank Hewitt Associates for their help in providing the data. We are particularly grateful to Lori Lucas and Yan Xu, two of our many contacts at Hewitt Associates, and to Greg Stoner and other employees at the two companies studied in the paper. We thank Jonathan Skinner and participants at the 2005 NBER Aging Conference for helpful comments and Hongyi Li for excellent research assistance. Choi acknowledges financial support from the Mustard Seed Foundation. Choi, Laibson, and Madrian acknowledge individual and collective financial support from the National Institute on Aging (grants R01-AG021650 and T32-AG00186). The opinions and conclusions expressed are solely those of the author(s) and do not represent the opinions or policy of NIA, the Federal Government, or the NBER. Laibson also acknowledges financial support from the Sloan Foundation.

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Economics Commons



Date Posted: 28 August 2019