Remaking retirement investors: behavioural economics and occupational pension funds in the UK and USA

Abstract

Summoned up within the defined-contribution (DC) plans that now predominate in the UK and USA, the financial subject of the retirement investor is identified by behavioural economics as the crucial problem to be solved in present-day occupational pension provision. Interventions are being made that: promote individual participation in plans through auto-enrolment techniques; increase the rate at which individuals make tax-favoured payments into plans through contribution escalator schemes; and cater for the decision-making and risk management deficiencies of individuals by providing default option funds with in-built ‘life-style’ and ‘target-date’ investment strategies. After Deleuze and Foucault, we argue that this ‘behavioural revolution’ is a rearticulation of the heterogeneous elements which, in relation, produce the dispositif (apparatus) of DC plans as a distributed form of agency that places the retirement investor at its centre. Behavioural economics is shown to continue the inherently incomplete remaking of retirement investors within DC plans, necessarily precarious financial subjects who face the highly uncertain prospect that returns on investment after fees will be sufficient to meet their expectations of security in old age.