<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...

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

Article Category: Research Article

Published Online: Dec 29, 2017

Page range: 172 - 188

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

Keywords
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.

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

Article Category: Research Article

Published Online: Dec 29, 2017

Page range: 172 - 188

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

Keywordspensions, 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.

Keywords
pensions, employer decision-making, PRSAs, bounded rationality, small business