JSIT20-03: Pension Plan Types and Social Security Program Knowledge: New Survey Evidence

Knowledge of the Social Security (SS) program, including when to claim benefits and eligibility for benefits, is shown to affect work, consumption and savings decisions before retirement, especially among women, and in turn impacts financial well-being in retirement. Despite extant literature on retirement planning and SS claiming decisions, little is known about the public’s understanding of the SS program as it intersects with pension plans, two pillars of the “three-legged stool.” The growing prevalence of defined contribution (DC) plans implies that more employees are called upon to manage their own wealth in retirement. While prior research suggests that individuals with DC plans, especially men, are more likely to possess higher general financial knowledge than those with defined benefit (DB) plans, and that women are less likely to have DC plans than men, it remains unclear whether individuals’ pension types are associated with their knowledge of SS and whether these associations differ by gender. Utilizing merged data from multiple surveys in the nationally representative Understanding America Study, I examine how nine aspects of SS knowledge vary across segments of the population with different types of pension plans (DB, DC, both, neither), and whether gender moderates the associations between pension types and SS knowledge, adjusting for other characteristics, and using ordinal and binomial logistic regression models. Study findings have potential to help identify target groups for Social Security agency communication and outreach efforts based on people’s pension plan types and gender, providing evidence for informational interventions that enhance financial well-being in retirement.