Absence of conflict of interest.
Citation
Highlights
- The study's objective was to examine the impact of an informational flyer on retirement contributions. This profile focuses on the individuals who were contributing to the supplemental retirement savings plan. The authors investigated similar research questions for another sample, the profile can be found here.
- The study was a randomized controlled trial that assigned individuals to one of three treatment groups or a control group. The authors used data from the North Carolina Retirement System administrative records and statistical models to compare contribution changes observed pre- and post-intervention between treatment and control group members.
- The study found that individuals who received the informational flyers were more likely to increase their retirement contributions than individuals in the control group.
- This study receives a high evidence rating. This means we are confident that the estimated effects are attributable to the informational flyers, and not to other factors.
Features of the Intervention
To increase contributions to the supplemental retirement savings plans, the authors created three different versions of an informative flyer about retirement savings strategies for older workers. The baseline flyer provided general information about supplemental saving plans and information on catch-up provisions. The other flyers (longevity and tax advantage) included the information from the baseline flyer with additional targeted information. The longevity flyer contained information on average life expectancy when retiring at age 65 and included a sense of urgency on saving for future medical expenses. The tax advantage flyer included a positive framing to encourage individuals to benefit from the tax-advantaged nature of supplement saving plan contributions.
Features of the Study
The study was a randomized controlled trial that targeted active North Carolina state employees, ages 50 to 69, with an active account with a balance of more than $1 and year-to-date contributions of less than $10,000 in the Teachers' and State Employees Retirement System. The study authors randomly assigned the participants into one of three treatment groups (baseline, longevity, or tax advantage) or a control group. The control group received no flyer while the subsequent treatment groups received one of the three different flyers. The study sample included 6,554 active workers in North Carolina state agencies as of November 2014 who had a current account with at least $1 and year-to-date contributions of less than $10,000. Over half of the sample was female (56%), with a median age of 56.4, a median salary of $47,204, and the median years of service was 18 years. The study authors used administrative data provided by the North Carolina Retirement System at three time points: baseline (October 31, 2014), short-term (December 31, 2014), and medium-term (August 15, 2015). The authors used statistical models to compare contribution changes observed pre- and post-intervention between individuals in the treatment and control groups.
Findings
Knowledge and skills for financial decision making
- The study found that over the short-term, individuals in the treatment groups were significantly more likely to make any changes in contributions to their accounts at a rate of 3.6% versus 2.4% for those in the control group.
- The study found that over the short-term, the treatment groups increased their contributions at a rate of 2.8%, which was significantly higher than the 1.8% rate for the control group.
- The study found that over the medium-term, the treatment groups made net changes at a rate of 17.8%, which was significantly higher than the 15.3% rate for the control group.
Considerations for Interpreting the Findings
The authors acknowledge that workers at older ages may have other sources of retirement savings and therefore may not elect to invest in their employers’ supplemental savings plans.
Causal Evidence Rating
The quality of causal evidence presented in this report is high because it was based on a well-implemented randomized controlled trial. This means we are confident that the estimated effects are attributable to the informational flyers, and not to other factors.