“Communication must make clear what the uncertainty surrounding the pension amount entails”
What is the focus of the paper?
This paper explores how pension participants interpret various visualizations of their expected pension benefits (and the associated uncertainty). Through interviews, the study examined how people understand three types of visualizations: the ‘navigation metaphor,’ as featured in mijnpensioenoverzicht.nl (showing the most likely pension outcome, the outcome if things go well, and the outcome if things go poorly); the fan visualization (displaying multiple possible outcomes); and the dot plot (illustrating the probability of different outcomes).
What are the key findings?
Pension participants primarily focus on the ‘likely pension benefit’ and acknowledge its uncertainty. The navigation and fan visualizations are interpreted almost identically, while the dot plot is perceived as complex but insightful. Younger participants tend to focus on the uncertainty surrounding their financial future, whereas older participants are more concerned with the amount and adequacy of the benefit. Displaying amounts as a percentage of current net income is generally appreciated. Comparing the accumulated amount with that of similar participants provides reassurance, particularly for younger respondents, but it is less relevant for participants who are mainly interested in understanding their own financial situation.
What are the implications?
- Pension participants must have a realistic expectation of their pension benefits, as overly high expectations can lead to dissatisfaction.
- Communication should make clear that the pension amount can vary, while also helping participants to interpret this uncertainty effectively.
- A guide or explanatory note could potentially further clarify the dot plot.
- Combining a dot plot with the navigation metaphor could improve the accuracy of interpretation.