Understanding Trading Behavior in 401(k) Plans

We use a new database covering 1.2 million active participants to study trading activities in 1,530 defined contribution retirement plans. Descriptive statistics and regression analysis indicate some interesting trading patterns. First, we show that trading activity in 401(k) accounts is very limited: only 20% of participants ever reshuffled their portfolios in two years. Second, demographic characteristics are strongly associated with trading activities: traders are older, wealthier, more highly paid, male employees with longer plan tenure. Finally, we find that plan design factors, such as the number of funds offered, loan availability, and specific fund-families offered have significant impacts on 401(k) plan participants’ trading behavior. Moreover, on-line access channels stimulate participants to trade more frequently, although they do not increase turnover ratio as much. We conclude that plan design features are crucial in sharing trading patterns in 401(k) plans.

Slow-roll Extended Quintessence

We derive the slow-roll conditions for a non-minimally coupled scalar field (extended quintessence) during the radiation/matter dominated era extending our previous results for thawing quintessence. We find that the ratio $\ddot\phi/3H\dot\phi$ becomes constant but negative, in sharp contrast to the ratio for the minimally coupled scalar field. We also find that the functional form of the equation of state of the scalar field asymptotically approaches that of the minimally coupled thawing quintessence.Comment: 11 pages, 4 figures, references added, to appear in Phys. Rev.

Winners and Losers: 401(k) Trading and Portfolio Performance

Few previous studies have explored how individuals manage their defined contribution (DC) pension plan assets, even though such plans constitute an increasingly important component of retirement wealth. Using a unique new dataset on over one million active 401(k) plan participants in a wide range of plans, we assess the impact of trading on investment performance in DC plans. We find that, in aggregate, the risk-adjusted returns of traders are no different than those of nontraders. Yet certain types of trading such as periodic rebalancing are beneficial, while high-turnover trading is costly. Interestingly, those who hold only balanced or lifecycle funds, whom we call passive rebalancers, earn the highest risk-adjusted returns. These findings should interest fiduciaries responsible for designing DC pensions and regulators of the retirement saving environment.