Are you saving as much as your peers for retirement?

The average 401(k) account balance is $91,100, but you can probably do better, right?

That’s the idea behind peer comparison tools that let retirement savers compare themselves against their co-workers, people of similar income or their neighbors. It’s an effort to nudge retirement savings levels higher by employing the social comparison theory, which proposes that we judge our self-worth in part by how we measure up to others.

Such tools can produce meaningful results. For example, Empower Retirement, which administers $440 billion in assets for more than 7.5 million retirement plan participants, found that participants who used its peer comparison tool raised their average deferral rate from 7 percent to 9 percent on average. Empower’s tool allows savers to make savings comparisons based on age, gender and income.

Voya Financial recently rolled out its latest peer comparison tool. Voya, formerly ING U.S., which pioneered the use of peer comparison tools for retirement plans in 2009, claims that plan participants who have used the new tool are now contributing 7.3 percent on average compared to the 5 percent average for participants in small and mid-size retirement plans.

Yet not all the evidence favors using peer pressure to encourage people to save more.

Harvard, Yale and Wharton researchers conducted an experiment to see if peer comparison could boost enrollment in a 401(k) plan. They sent out a simplified enrollment form to a control group without peer comparison information and the same form with peer comparisons. The findings? The group with the peer comparisons had an enrollment rate that was actually one-third lower than the group that didn’t get any peer information, 6.3 percent compared to 9.9 percent.

“The evidence suggests that peer information is discouraging and demotivating for some subpopulations of employees,” the researchers concluded.

The mixed evidence on the result of peer comparisons means that employers should rigorously test how such tools affect their workers’ savings habits, said Stephen Wendel, head of behavioral science at investment research firm Morningstar. The results depend on the employee population and how the information is presented, he said.

Setting the reference point for the comparison can be a challenge, too. “We want participants to compare themselves to the top savers, not the average,” said Stephen Jenks, Empower Retirement’s chief marketing officer. “The goal is not to create more C students. We want A students.”

So how do you make comparisons that motivate employees to save more? “Framing the conversation in a way that the information is personal is the best solution,” said Kelly Amato, director of retirement plans at consulting firm NFP.

Not everyone is persuaded. “Peer comparisons can give you a false sense of hope,” said Steve Schweitzer, senior vice president with Ascensus Retirement Services, which administers $126 billion in assets for more than 1.7 million participants. Ascensus is studying whether to offer peer comparison tools for the more than 40,000 retirement plans it administers.

“For some people, it’s inspirational. For others, it’s demotivating,”Schweitzer said. “”There is no one magical bullet to improve retirement savings.”

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