Pension plan participant choice: Evidence on defined benefit and defined contribution preferences

Paul Gerrans, Gordon L Clark

    Research output: Contribution to journalArticleResearchpeer-review

    9 Citations (Scopus)

    Abstract

    We report analysis of voluntary switching from defined benefit (DB) to defined contribution (DC) plans in an environment best characterised as benign. Using a large Australian fund database we identify socio-demographic correlates and the macroeconomic circumstances associated with DB to DC switching. The age of participants is an important correlate of switching behaviour, suggesting a degree of risk tolerance previously not recognised in the literature. It is also noted, however, that this type of switching behaviour may involve secondary behaviour such that uncertainties of DC investment performance are managed by reference to an asset allocation formula that maps to the previous DB investment strategy.
    Original languageEnglish
    Pages (from-to)351 - 378
    Number of pages28
    JournalJournal of Pension Economics and Finance
    Volume12
    Issue number4
    DOIs
    Publication statusPublished - 2013

    Cite this

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    abstract = "We report analysis of voluntary switching from defined benefit (DB) to defined contribution (DC) plans in an environment best characterised as benign. Using a large Australian fund database we identify socio-demographic correlates and the macroeconomic circumstances associated with DB to DC switching. The age of participants is an important correlate of switching behaviour, suggesting a degree of risk tolerance previously not recognised in the literature. It is also noted, however, that this type of switching behaviour may involve secondary behaviour such that uncertainties of DC investment performance are managed by reference to an asset allocation formula that maps to the previous DB investment strategy.",
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    Pension plan participant choice: Evidence on defined benefit and defined contribution preferences. / Gerrans, Paul; Clark, Gordon L.

    In: Journal of Pension Economics and Finance, Vol. 12, No. 4, 2013, p. 351 - 378.

    Research output: Contribution to journalArticleResearchpeer-review

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