What Do Employees Know About Their Pension Plan?

Original survey data based on 529 respondents in a large organization are used to analyze how much employees know about various features of their occupational pension plan. While the level of understanding was quite low among all employees, it was quite high among those for whom the knowledge matters most in terms of their behavioral decision making. Our results show that rather than being optimal labor contracts that workers enter into with full knowledge at the time of employment, pension contracts are more like contingent claims contracts evolving under conditions of uncertainty and incomplete information.