Bigger Is Better: Defined Contribution Menu Choices With Plan Defaults

Prior studies of core menu size in defined contribution plans found that smaller menus improve employee participation rates by reducing choice overload. However, the widespread adoption of automatic enrollment and default investments requires revisiting this research to determine its continued relevancy. This paper explores the relationship between core menu size and participant-investment decisions.

In this report, you will learn:
  • Why participants are more likely to accept their plan’s default when faced with larger core menus
  • How larger core menus can result in more-efficient portfolios for participants self-directing their accounts
  • Additional considerations associated with larger core menus
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