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- Title
Participant-Proofing the DC Investment Fund Lineup.
- Authors
Lucas, Lori
- Abstract
From January 2006 to September 2012, defined benefit (DB) plans outperformed defined contribution (DC) plans by nearly one percentage point. Over time, this type of differential can mean the difference between participants having a comfortable versus challenging retirement. This article focuses on participant behavior as a key reason behind DB plans' superior investment performance. The author discusses behavioral finance's considerable research on participant inertia, momentum market timing, framing effects and choice fallacy. By bringing more of the lessons of behavioral finance to the structure and communication of the core fund lineup, participants may enjoy a greater chance of capturing more DB-like performance.
- Subjects
DEFINED benefit pension plans; DEFINED contribution pension plans; RETIREMENT; BEHAVIORAL economics; MARKET timing; INTERORGANIZATIONAL relations
- Publication
Benefits Quarterly, 2013, Vol 29, Issue 3, p33
- ISSN
8756-1263
- Publication type
Article