Defined Contribution Investment Menu Design: Enhancing Participant Investment Behavior and Sponsor Fiduciary Confidence

TIAA-CREF Institute Fellows Symposium
TIAA-CREF Headquarters
New York, New York

September 2007 |

The TIAA-CREF Institute hosted two Fellows Symposiums in the fall of 2007 focusing on helping employers help their employees "to and through retirement." The symposiums were intended to engage TIAA-CREF leadership in meaningful dialogue with leading academics and researchers in the fields of retirement and financial security.

The first symposium, on September 7, 2007, focused on topics related to helping plan sponsors ensure that their employees are financially prepared for retirement ("to retirement"). Co-Organized with Olivia S. Mitchell of The Wharton School at University of Pennsylvania, the symposium covered the following topics:

• New developments & best practices in investment menu design, including the optimal number of funds, default allocations and default enrollment and the role of lifecycle funds;
• Next generation of investment products;
• Behavioral impact of menu design, including the effects on participant decision-making, implications for education and advice, financial literacy and choice overload and how to serve differing levels of financial sophistication within plans;
• The Pension Protection Act and related fiduciary issues for plan sponsors and providers;
• Regulators’ perspectives on investment menu design;
• Economic and financial issues of plan design

The symposium featured presentations by:
Brett Hammond, Managing Director and Head of Investment Strategy, TIAA-CREF
Sheena Iyengar, Professor of Management, Columbia University
David Richardson, Principal Research Fellow, TIAA-CREF Institute
Stephen Saxon, Attorney, Groom Law Group
Jack VanDerhei, Professor of Risk, Insurance and Healthcare Management,
Temple University
Luis Viceira, Professor of Business Administration, Harvard University

The second symposium in this series,held in October, focused on understanding and influencing the retirement decision and exploring strategies to ensure financial security throughout retirement ("through retirement").