Decision-making in defined contribution pension plans

Rights statement
Awarding institution
  • University of Strathclyde
Date of award
  • 2008
Thesis identifier
  • T11915
Qualification Level
Qualification Name
Department, School or Faculty
  • This thesis - which comprises mainly a collection of published articles - is about the saving and investment decision-making of members of defined contribution (DC) pension plans. An analysis of the decisions individuals make when saving for retirement fits well within the growing literature on behavioural economics and finance, which is based on the idea that many individuals are subject to behavioural traits that can lead to errors in decision-making. This literature is influential in the ideas developed and hypotheses tested in this thesis. The analysis in this thesis uses different methods - focus groups, postal surveys, and analysis of administrative data - to investigate the approaches DC scheme members take to saving and investment decisions and to assess the consistency of those approaches with traditional and behavioural theory. On balance the behavioural theories appear better representations of what members do. The thesis also presents analysis where a simulation model is used to investigate the effects of inertia (in terms of joining decisions) and default bias (in terms of investment choice) on the pension outcomes DC scheme members are likely to enjoy. The thesis concludes with policy suggestions concerned with improving the design of DC pension plans and directions for further research.
Resource Type
Date Created
  • 2008
Former identifier
  • 769419