Using data from a near-universe of 401(k) plans, I document a large dispersion in 401(k) plan fees across employers. An employer at the 90th percentile offers a plan that charges employee participants over 70 basis points higher fees than an employer at the 10th percentile. This fee dispersion has sparked recent lawsuits, with participants using instances of high fees to accuse their employers of violating their fiduciary duties. I demonstrate that much of this dispersion is a natural outcome in a negotiated-price market with transaction costs and heterogeneous services. Therefore, the variation in fees may not necessarily suggest that employers violate their fiduciary duties. Using a structural model that combines employers’ provider choices and providers’ dynamic fee competition, I estimate that differences in markups between employers explain 26% of the fee dispersion. I also find that a modest level of transaction costs is optimal for lowering plan fees due to providers’ dynamic incentives. While eliminating transaction costs decreases fees by 4%, modest transaction costs result in a larger fee reduction of 9%.

This paper examines the impact of Defined Contribution (DC) pension plan enrollment on individuals’ non-pension investment behavior. I address selection concerns by exploiting exogenous changes in Swedish occupational pension rules. Using Swedish Tax Registry data, I find that DC enrollment significantly boosts stock market entry probability, with an initial increase of 4\% and a cumulative effect ranging from 9% to 63.5% over the first six years. This result is obtained after controlling for a variety of observables, including change in financial wealth. It thus highlights the importance of information costs for explaining the limited stock market participation observed in the data. For those individuals that were already stockholders, DC plan exposure raises the share of risky assets in their liquid portfolios, also consistent with a learning channel effect and/or DRRA preferences or tax optimization. Interestingly I find a mixed impact on diversification: while DC enrollment increases the likelihood of buying mutual funds and raises their share relative to financial wealth, individuals decrease their share of funds over risky assets. Overall, these findings show that DC plans positively impact stock market engagement outside retirement accounts by enhancing financial literacy, manifested in reduced stock market participation costs.

We examine how funding deficit pressures shape the risk-taking of U.S. corporate defined-benefit (DB) pension plans and how targeted regulatory relief can mitigate these incentives. Using the 2012 MAP-21 reform, which temporarily eased funding pressure by revising discount rate calculations, we show that plans receiving greater relief significantly reduced their equity allocations and shifted toward safer assets. This de-risking was most pronounced among active plans and those sponsored by more financially constrained firms. Our findings demonstrate that targeted regulatory relief can curb risk-taking incentives, even without altering underlying economic conditions or financial reporting standards, and shed light on the likely (and unlikely) frictions driving such behavior.