NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Veronika K. Pool

Vanderbilt University
401 21st Avenue South
Nashville, TN 37203

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Institutional Affiliation: Vanderbilt University

NBER Working Papers and Publications

July 2020Out of Sight No More? The Effect of Fee Disclosures on 401(k) Investment Allocations
with Mathias Kronlund, Clemens Sialm, Irina Stefanescu: w27573
We examine the effects of a 2012 regulatory reform that mandated fee and performance disclosures for the investment options in 401(k) plans. We show that participants became significantly more attentive to expense ratios and short-term performance after the reform. The disclosure effects are stronger among plans with large average contributions per participant and weaker for plans with many investment options. Additionally, these results are not driven by secular changes in investor behavior or sponsor-initiated changes to the investment menus. Our findings suggest that providing salient fee and performance information can mitigate participants' inertia in retirement plans.
February 2013It Pays to Set the Menu: Mutual Fund Investment Options in 401(k) Plans
with Clemens Sialm, Irina Stefanescu: w18764
This paper investigates whether mutual fund families acting as trustees of 401(k) plans display favoritism toward their own funds. Using a hand-collected dataset on retirement investment options, we show that poorly-performing funds are less likely to be removed from and more likely to be added to a 401(k) menu if they are affiliated with the plan trustee. We find no evidence that plan participants undo this affiliation bias through their investment choices. Finally, the subsequent performance of poorly-performing affiliated funds indicates that these trustee decisions are not information driven and are costly to retirement savers.

Published: Veronika K. Pool & Clemens Sialm & Irina Stefanescu, 2016. "It Pays to Set the Menu: Mutual Fund Investment Options in 401(k) Plans," Journal of Finance, American Finance Association, vol. 71(4), pages 1779-1812, 08. citation courtesy of

 
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