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The Impact of Employer Defaults and Match Rates on Retirement Saving

"Plans with low default rates that match a high percentage of employee earnings induce higher-income participants to actively move away from the low default savings rate, resulting in a wider savings gap between higher- and lower-income employees. When default savings rates are set higher, fewer employees move away from the default resulting in higher and more equal savings rates.... [H]igher default savings rates increase usage of plan default investments."

Do Defaults Limit Consumer Response to Rainy-Day Funds? Evidence from 401(k) Participants During the COVID-19 Pandemic

"Using a large database of 401(k) plan participants, [the authors] estimate the probability that a worker will contact a recordkeeper about initiating a distribution from their retirement account following passage of the [CARES Act]. Self-directed workers in occupations with high subsequent unemployment were more likely to call about withdrawing funds from their account than workers in delegated investment accounts. Workers defaulted into target-date funds and those who chose to delegate investments through a managed account were both less likely to contact the recordkeeper about making a post-CARES Act distribution."