Boettner Center for Pensions and Retirement Research
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Working Paper

Plan Design and 401(k) Savings Outcomes

James J. Choi, David Laibson, Brigitte C. Madrian

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Abstract — We assess the impact of 401(k) plan design on four different 401(k) savings outcomes: participation in the 401(k) plan, the distribution of employee contribution rates, asset allocation, and cash distributions. We show that plan design can have an important effect on all of these savings outcomes. This suggests an important role for both employers in determining how to structure their 401(k) plans and government regulators in creating institutions that encourage or discourage particular aspects of 401(k) plan design.