Sex and 401(k) Plans

Introduction

Over the past two decades, private pension coverage has shifted from defined benefit plans to 401(k) plans. This shift has many important implications for the retirement security of older Americans. One so-far-overlooked consequence is that it has changed the relative price of annuities for men and women. Annuities are financial instruments that guarantee retirees a lifetime stream of income in exchange for an initial premium payment. The reason for the change in the price is that annuities provided under the two types of plans are regulated by different legal regimes…