Pension plan types and social security program knowledge: New survey evidence

Knowledge of the Social Security (SS) Old-Age and Survivors Insurance program affectspeople’s work, consumption, and savings decisions before retirement and in turn impactsfinancial well-being in retirement. Despite extant literature on retirement planning and SSclaiming decisions, little is known about the public’s SS knowledge as it intersects with pensionplans, two pillars of the “three-legged stool” of retirement security. While research suggests thatindividuals with defined-contribution (DC) plans, especially men, are more likely to possesshigher financial literacy than those with defined-benefit (DB) plans, it remains unclear whetherindividuals’ pension types are associated with their SS knowledge and whether these associationsdiffer by gender. Utilizing merged data from the Understanding America Study, this studyexplores how the levels of SS knowledge vary across segments of the population by pensionstatus (DB, DC, both, neither), and whether gender moderated the associations between pensiontype and SS knowledge. Results indicate that relative to those with no pension, people with apension consistently had higher odds of correctly answering questions assessing SS knowledge.Specifically, those with DC only had higher odds of correctly answering questions on disabilitybenefits, age adjustment, claiming upon retirement, and spousal benefits. Those with DC and DBhad higher odds of correctly answering the question on spousal benefits. Women with no pensiontend to have lower overall SS knowledge relative to women with DB only. These results suggestthat individuals without any type of pension, especially women, could benefit fromcommunication efforts to enhance their SS knowledg