Defaults increase retirement plan enrollment

Status Quo Bias and Financial Products
Intervention Financial Products

Increasing enrollment rate through nudges

Intervention Desrciption

The authors examined choices made for retirement plans at a particular firm. Participants (who were existing employees) were subjected to a default plan that varied by age. The researchers found that having a default plan greatly increased the probability that an employee would enroll in that plan. This resulting decision can lead to welfare gains and other financial benefits for the employees.