Partially supported by the TIAA-CREF Institute, this project is part of a larger project that analyzes the retirement savings choices of a large sample of college and university professors in the United States, and will use this analysis to gain insights into alternative theories of savings behavior.
Using merged data from TIAA-CREF Pension System and from the Faculty Retirement Survey (FRS) that includes longitudinal payroll information for over 40,000 faculty at 100 U.S. colleges and universities, the researchers aim to better understand what explains the differences in individuals' retirement wealth, focusing on the role of employer-provided pensions. Specifically, the researchers propose to:
- Present a careful descriptive analysis of the distribution of pension wealth at or near retirement for the sample.
- Determine whether the variation in pension wealth relative to income is reduced (or raised) when employer contribution rates are higher.
- Compare total retirement wealth for older faculty who have worked at colleges with higher and lower employer contribution rates and estimate the impact of employer contributions on pension wealth at retirement, providing further insights into the validity of alternative models of savings.
Potential Implications:
- The study may help answer questions such as: do individuals who work at institutions with more "generous" pension plans retire with significantly higher retirement savings? This may have important implications for how institutions might structure pay to ensure that faculty have adequate income in retirement.
- They will characterize the effect of raising the employer pension contribution rate on the overall variation in pension wealth relative to pre-retirement income. This will enable us to estimate what fraction of the variation in retirement wealth is explained by the combination of different employer choices, or "naive" savings behavior.
