Pension provision by small employers in Ireland: an analysis of PRSAs using bounded rationality theory
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Maureen Maloney (2014) Pension Provision by Small Employers in Ireland: An analysis of PRSAs using bounded rationality theory. Conference Paper
This paper applies the theory of bounded rationality to study small employer pension provision decision-making in Ireland. PRSA pension products were intended to provide inexpensive, flexible pension options, particularly targeted towards small enterprises and yet employees in small organisations are the least likely to be members of pension schemes. Ten years after their introduction, evidence suggests that the PRSA pension product had little impact on pension coverage in Ireland. Drawing on the theory of bounded rationality and a review of the legislative and institutional context within which small employers in Ireland make pension provision decisions, this paper presents a small employer pension decision making model. A range of propositions are set out which illuminate small employer pension provision practices 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.