The Design of Retirement Plan Match Schedules

We use survey responses to hypothetical scenarios linked with administrative data on employer-sponsored defined contribution retirement plans in the US to investigate the efficiency and equity implications of employer contribution matching formulas. We find that (i) survey responses can be used to accurately predict saving responses to both observed and hypothetical plans, (ii) saving is inelastic to the match rate, (iii) non-elective employer contributions do not crowd out employee saving. These patterns imply that (iv) plans combining lower match rates with non-elective contributions generate higher savings and more equitable employer contribution distributions, and (v) many of the most common plans are strictly dominated along both dimensions.