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Nobel Prize winner Richard Thaler on Choice Architecture in Pension Systems

What does academic research and practical experiences tell us about choice architecture in pension systems? Professor Richard Thaler, University of Chicago, visited the Swedish House of Finance on 18 September to share his views based on his many years of research.


Watch his presentation here.

Richard Thaler and Cass Sunstein coined the term “choice architecture” with their 2008 book “Nudge: Improving Decisions about Health, Wealth, and Happiness”. The term refers to the design of the environment where people make choices, and has great impact on how we actually chose.


– Amazon, for example, is excellent at choice architecture. When you go to their website there are so many books but you have no trouble finding what you are looking for. The idea of choice overload is only a problem when there is bad choice architecture, says Richard Thaler.


Choice architecture has powerful effects


When it comes to the design of pension systems, choice architecture is of great importance to society. Richard Thaler and Henrik Cronqvist, University of Miami and affiliated research fellow at the Swedish House of Finance, have been studying the design and effects of the Swedish premium pension setup.


– There were two nudges at the introduction of the premium pension system. The nudge for the default fund and the nudge to be independent and not to chose the default fund. In the end, the nudge to be independent won and two thirds chose to follow the advice to create their own portfolio, says Richard Thaler.


Things changed over time and now it’s only a very small fraction of new entrants into the system that decide to chose their own portfolio. However, the people that initially were nudged into the default fund or into independent portfolios have mostly stuck with their choices. The effects of nudges seem to be quite long term.

Richard Thaler also discussed new possible designs for the Swedish pension system. Watch the presentation here.

A previous paper on the subject that Thaler refers to in his presentation can be found here.


Also presenting at the seminar were Anders Anderson, Director of the Swedish House of Finance, Lisa Bruggen and Monika Böhnke, University of Maastricht, and Paul Todd, NEST.

Anders Anderson talked about his survey where Swedish pension investors’ actual and perceived level of financial literacy was matched to their actual retirement savings decisions.

Watch the presentation here.

Read Anders Anderson and David T. Robinson paper “Self-Awareness, Financial Advice and Retirement Savings” here.

Anders Anderson PPT-presentation: Anders Anderson presentation 18 sep 2017


Lisa Bruggen and Monika Böhnke shared results from their studies of pension communication. Watch their presentation here.

Lisa Bruggen and Monika Böhnke PPT-presentation: Lisa Bruggen_Monika Böhnke presentation 18 sep 2017


Paul Todd, NEST, talked about their experiences of using choice architecture. Watch his presentation here.

Paul Todd PPT-presentation: Paul Todd presentation 18 sep 2017

The seminar was concluded with a panel including all presenters and chaired by Stefan Lundbergh, Cardano.


Article in DN from the seminar (in Swedish): http://www.dn.se/ekonomi/svensk-valfrihet-om-pensionen-leder-fel/

Read the report of Stefan Lundbergh (in Swedish) to the Swedish government: “Förstudie om möjliga strukturella förändringar för ett tryggare och mer effektivt premiepensionssystem” here.




08:30-09:00    Registration & coffee

09:00-09:10    Opening Statement by Annika Strandhäll

09:10-10:00     Richard H. Thaler “Evaluating Choice Architecture in a Premium Pension System”

10:00-10:20     Anders Anderson “Self Awareness, Financial Advice & Retirement Savings Decisions”

10:20-10:50     Coffee break

10:50-11:10       Lisa Bruggen/Monika Böhnke “What Drives Member’ Choice in Premium Pension?”

11:10-11:30        Paul Todd “Choice architecture in practice – a field report from NEST in the UK”

11:30-11:50        Panel discussion with the speakers, chaired by Stefan Lundbergh

11:50-12:00       Q&A


Place: Westmans Event & Konferens, Holländargatan 17.

There is no registration fee for the seminar. However, we have a limited number of seats and therefore require advance registration. Please register no later than September 14.

Welcome!  Register here!


START TIME: Mon, 18 September 2017 9:00 am

END TIME: Mon, 18 September 2017 12:00 pm

LOCATION: Westmans Event & Konferens, Holländargatan 17, Stockholm