“In the reformed pension system, uncertainty becomes more visible. This study shows that communication about potential fluctuations in pension outcomes is best received when it clearly explains which part of pension income will remain unchanged.’’

 

What is the focus of the paper?

This study examines how pension funds can best communicate uncertainty and potential fluctuations in pension outcomes within the reformed Dutch pension system. In an online experiment involving 2,024 retirees, four versions of a pension communication were tested: a standard message; a message emphasizing what remains unchanged under the new pension law, namely the state pension (AOW); a message openly acknowledging that it is not yet clear what the changes will mean for the amount of each participant’s pension; and a message explaining that the transition to the new system was developed with broad stakeholder involvement. The study then examined the spontaneous reactions and emotions elicited by the messages, how participants evaluated them, including in terms of trust and clarity, and what questions they still had after reading them. It also examined whether financially vulnerable participants responded differently from those who were not financially vulnerable.

 

What are the key findings?

Of the three communication strategies examined, the message emphasizing that the state pension (AOW) would remain unchanged performed best. This message was rated as clearer, raised fewer questions, and generated relatively more positive responses than the other messages. Communicating transparently about uncertainty did not lead to clearly more positive or negative responses than the standard message. By contrast, the message emphasizing the broad support for the new pension law generated slightly more negative responses and weaker feelings of certainty. Financially vulnerable participants generally responded more negatively to all messages, but there was no evidence that they responded differently to specific communication strategies.

 

What are the implications?

  • Communication about pension changes is more effective when it clearly identifies which parts of pension income will remain secure: this provides clarity, elicits more positive responses, and makes uncertainty about the remaining parts easier to accept.
  • Simply acknowledging uncertainty does not appear harmful, but it also does not clearly improve outcomes compared with standard communication.
  • Emphasizing the broad support behind the pension reform appears to add little value and may even trigger less positive responses than standard communication.
  • Financially vulnerable participants require additional attention because they consistently evaluate pension information more negatively. However, there is no evidence that they require a different communication strategy from participants who are not financially vulnerable.