<abstract xmlns="http://www.w3.org/1999/xhtml"><p>This paper applies a model of bounded rationality to study small employers’ decision-making on pension provision in Ireland. Personal Retirement Savings Account (PRSA) pension products were intended to provide inexpensive, flexible pension options, particularly targeted towards small enterprises. After 10 years of their introduction, evidence suggests that the PRSA pension product has little impact on pension coverage in Ireland and the employees of small organisations are least likely to be the members of pension schemes. Drawing on the theory of bounded rationality and a review of the legislative and institutional context within which small employers in Ireland make decisions on pension provision, this paper presents a pension decision-making model of small employers based on the work of <xref ref-type="bibr" rid="j_ijm-2017-0018_ref_054_w2aab3b7b4b1b6b1ab1b4c54Aa">Simon (1983)</xref>. A range of propositions are set out for empirical research to examine pension provision practices of small employers relating to whether they have a tendency to organise rather than sponsor PRSAs for their employees. The implications for theory, research and policy are explained.</p></abstract>

This paper applies a model of bounded rationality to study small employers’ decision-making on pension provision in Ireland. Personal Retirement Savings Account (PRSA) pension products were intended to provide inexpensive, flexible pension options, particularly targeted towards small enterprises. After 10 years of their introduction, evidence suggests that the PRSA pension product has little impact on pension coverage in Ireland and the employees of small organisations are least likely to be the members of pension schemes. Drawing on the theory of bounded rationality and a review of the legislative and institutional context within which small employers in Ireland make decisions on pension provision, this paper presents a pension decision-making model of small employers based on the work of Simon (1983). A range of propositions are set out for empirical research to examine pension provision practices of small employers relating to whether they have a tendency to organise rather than sponsor PRSAs for their employees. The implications for theory, research and policy are explained.

Pension provision by small employers in Ireland: an analysis of Personal Retirement Savings Account (PRSA) using bounded rationality theory

The Irish Journal of Management

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

This paper applies a model of bounded rationality to study small employers’ decision-making on pension provision in Ireland. Personal Retirement Savings...

Risk	Risk	Volatility band (%)	Aviva	Irish	New	Zurich	Total
rating	classification	Volatility band (%)	Aviva	Life	Ireland	Zurich	Total
1	Very low	0.0–0.5	1	1	1	1	4
2	Low	0.5–2.0	0	2	0	0	2
3	Low to medium	2.0–5.0	1	4	0	0	5
4	Medium	5.0–10	2 (one rated 4–5)	5	2	3	12
5	Medium to high	10.0–15.0	5	4	5	5	19
6	High	15–25	1	5	2	5	13
7	Very high	25 +	0	1	0	0	1
	Not classified		6	0	2	0	8

Information	Aviva	Friends	Irish	New Ireland	Zurich
Information	Aviva	First	Life	New Ireland	Zurich
Employer-sponsored (or group) PRSA information			x	x	x
PRSA download brochure for employers				x
PRSA download brochure for individuals			X
Fund guides download brochure with information about PRSAs	x				x

Pension provision by small employers in Ireland: an analysis of Personal Retirement Savings Account (PRSA) using bounded rationality theory

Article Category: Research Article

Publicado en línea: 29 dic 2017

Páginas: 172 - 188

DOI: https://doi.org/10.1515/ijm-2017-0018

Palabras clave
pensions, employer decision-making, PRSAs, bounded rationality, small business

© 2017 Maureen Maloney and Alma McCarthy

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Figure 1

Figure 2

Figure 3

Figure 4

Investment funds classified using ESMA risk ratings

Information about PRSAs accessed from pension provider websites

Pension provision by small employers in Ireland: an analysis of Personal Retirement Savings Account (PRSA) using bounded rationality theory

Article Category: Research Article

Publicado en línea: 29 dic 2017

Páginas: 172 - 188

DOI: https://doi.org/10.1515/ijm-2017-0018

Palabras clavepensions, employer decision-making, PRSAs, bounded rationality, small business

© 2017 Maureen Maloney and Alma McCarthy

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Figure 1

Figure 2

Figure 3

Figure 4

Investment funds classified using ESMA risk ratings

Information about PRSAs accessed from pension provider websites

Palabras clave
pensions, employer decision-making, PRSAs, bounded rationality, small business