This project uses a newly developed defined contribution (DC) pension wealth calculator to generate new estimates of DC pension wealth for individuals in the Health and Retirement Study (HRS) with employer-provided pension Summary Plan Descriptions (SPD). There are six primary findings: First, pension wealth from voluntary saving (and accrued earnings thereon) comprises half of DC pension wealth calculated from the sample of matched SPDs in the HRS. Second, the DC/401(k) Calculator yields dramatically lower mean estimates of DC pension wealth for HRS participants than the Pension Estimation Program. In particular, DC pension wealth is calculated to be as much as 20-25 percent less when using a less restrictive set of modeling assumptions and arguably better input data, and wealth in 401(k)-type pension plans is implied to be as much as 40-50 percent less. Third, most of the reduction in estimated DC wealth occurs in the upper portion of the pension-wealth distribution. Fourth, the Pension Estimation Program actually understates DC wealth in the middle of the pension-wealth distribution. These results suggest that previous analyses that have used HRS pension wealth created from the matched SPD data have overstated retirement wealth adequacy among HRS participants. Fifth, estimates of the impact of pension wealth in prototypical reduced-form retirement models appear to be sensitive to the DC pension-wealth modeling assumptions used in the Pension Estimation Program. Finally, estimates of the impact of pension wealth on household saving show little sensitivity to DC pension-wealth modeling assumptions.
