In this provocative book, Richard A. Ippolito explores the relationship between employees’ preferences for certain types of pension plans and their productivity. Ippolito begins by reviewing how pensions influence workers’ behavior on the job, helping employers reduce early quit rates and increase early retirement rates. In a novel contribution, Ippolito then shows how pensions can assist employers in attracting and retaining workers who have personal attributes valued by the firm.

Challenging the accepted view of defined contribution plans, such as the 401k, as merely convenient tax-deferred savings plans, Ippolito argues that these plans can help firms select and pay their best workers without expending monitoring resources. Building on his proposals for managing private pension plans, Ippolito concludes with a blueprint for fixing the social security system that would promote incentives to work and save while at the same time improving the system’s financial condition.