About the Study
The Department of Labor (DOL) has sought effective strategies for encouraging its employees to increase their retirement savings. DOL employees receive an employer match of up to 5 percent of their salary for all contributions to the Thrift Savings Plan (TSP)—a program similar to the private sector’s 401(k) plans. Although there were many good reasons for why people might not participate in the TSP, a host of factors that have been identified by behavioral science might play an important role.
As part of the Department of Labor Behavioral Interventions (DOL-BI) project, the Chief Evaluation Office (CEO) partnered with the DOL Human Resources Division (DOL-HR) and with the Employee Benefits Security Administration (EBSA) to explore whether low-cost, behaviorally informed emails would result in more DOL employees starting to save, or saving more, for retirement. Researchers conducted two phases of testing, one in the fall of 2015 and one in the spring of 2016. Each one examined different behavioral messages and reminder strategies.
The DOL-BI project explores the use of behavioral insights to improve the performance and outcomes of DOL programs. It is sponsored by the DOL Chief Evaluation Office and draws on insights from behavioral economics, psychology, and related fields.
Can simple emails informed by behavioral science increase (1) the number of federal employees participating in the TSP and (2) the number contributing enough to receive the full employer match?
- Low-cost, behaviorally informed emails increased the number of DOL employees saving at least 5 percent of their salary by 7.5 percentage points.
- Emails raised the overall contribution rate by up to 0.4 percentage points or approximately $11,500 over an employee’s lifetime.
- Emails were not effective in causing non-contributors to start contributing a percentage of their salary to the TSP.
The Department of Labor (DOL) Chief Evaluation Office (CEO) sponsors independent evaluations and research, primarily conducted by external, third-party contractors in accordance with the Department of Labor Evaluation Policy. CEO’s research development process includes extensive technical review at the design, data collection and analysis stage, including: external contractor review and OMB review and approval of data collection methods and instruments per the Paperwork Reduction Act (PRA), review by academic peers (e.g., Technical Working Groups), and inputs from relevant DOL agency and program officials and CEO technical staff. Final reports undergo an additional independent expert technical review and a review for Section 508 compliance prior to publication. The resulting reports represent findings from this independent research and do not represent DOL positions or policies.