Using Behavioral Interventions to Increase Retirement Savings Final Project Brief
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About the Brief
Preparing for retirement is important. For many workers in the United States, a comfortable retirement may depend on the savings decisions they make now. Failing to save today can have very real consequences as people age, reducing the comforts they get to enjoy during retirement and their ability to cope with health and financial shocks. Following broader Federal policy, the U.S. 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.
In 2015, more than one-quarter of eligible DOL employees were contributing less than 5 percent of their salary to the TSP. 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. In 2014, DOL’s Chief Evaluation Office (CEO) contracted with Mathematica Policy Research and ideas to examine whether insights from behavioral science can be used to improve outcomes in DOL programs.
In this study, the researchers 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 (Phase 1) and one in the spring of 2016 (Phase 1). Each one examined different behavioral messages and reminder strategies. The study yielded several positive results. The brief describes the intervention context and design, discusses key findings, and identifies lessons learned from this study.
Citation
Amin, S., Chojnacki, G., Perez-Johnson, I., Darling, M., Moorthy, A., Lefkowitz, J. (2017). Emails Prompt Employees to Save More for Retirement. Chief Evaluation Office, U.S. Department of Labor.
The Department of Labor’s (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 and CEO’s research development process.