Workers' Knowledge of Their Pension Coverage: A Reevaluation

Abstract

Because employer-provided pensions represent an important source of income during retirement, accurate information on pension coverage would seem to be crucial for making sound decisions on retirement timing, saving and portfolio allocation.However, previous research suggests that workers' knowledge of their pension provisions is often incomplete or incorrect.This paper re-examines workers' knowledge of their pension coverage, using matched employer-employee data from the Federal Reserve Board's Survey of Consumer Finances.We find that, while most workers in our sample accurately reported the general features of their pension coverage, their knowledge of the detailed features was often fairly limited.