ABSTRACT
This chapter analyzes empirically the choice of pension of insured people with special emphasis on the question of whether insured people choose in their best financial interests. It also analyzes empirically the pension programme choice with respect to the relative returns of the pension programmes and the subjection and vulnerability to risk of the insured people, and different educational levels of the insured people. The chapter describes the institutional setting of the Colombian pension system and also discusses the data used, the model specification, and the results for the whole and the stratified sample, respectively. S. Benartzi and R. H. Thaler find experimental and empirical evidence in the United States that some pension fund participants use a simple rule of thumb in their asset allocation by dividing their contributions across all offered funds, independent of the risk structure of the different funds.
