Employee preferences for pension plan features

Data from 517 survey respondents were used to analyze the determinants of t he shares of a hypothetical $1,000 budget that employees were given to allo cate to cash wages and pension plan features involving early! retirement, p ostponed retirement, and inflation protection. Employee preferences for pen sion plan features generally reflected the potential for pensions to deal w ith such factors as risk sharing, family life-cycle decision making, and ca sh constraints, as those factors were related to observable personal and de mographic characteristics of employees as well as to their labor market cir cumstances and wealth embodied in their pension plans. Amongst other implic ations, our analysis highlights that the demand is greater for early retire ment and inflation protection than for postponed retirement, and the demand for early retirement is likely to increase as the workforce ages, dual pen sion families become more prominent, and layoffs and job changing continue.