Free to choose what by whom? Freedom of choice in occupational pension provision.

This paper investigates the experiences of a number of countries with freedom of choice in occupational pensions. Choice can be introduced for the beneficiaries or for the sponsors of pension schemes; those actors might be given a choice in terms of the type of pension plan, or in terms of how a mandated pension plan is implemented. On the one hand the paper discusses how various countries have implemented various choice options for employees who or on whose behalf pension entitlements are accumulated; or choice for the employers who have to sponsor the plan. One the other hand, the paper discusses how countries that allow for various degrees of choice have regulated their second and third pillar in order to limit moral hazard, transaction costs, bounded rationality of pension plan participants, insolvency of pension providers, adverse selection. In this context, the paper will look at the scope of choice and role of default options in the premium reserve system in Sweden and in the superannuation in Australia, the joint liability in Finish occupational pensions, the problems that led to the nudging of the NEST reform in the United Kingdom, and at benefit security guarantee schemes in Germany, Sweden, the United Kingdom, Switzerland and the USA.