Preparing for retirement: Tailoring, literacy and effective pension communication
In recent legal reform initiatives concerning the Pension Law, a crucial assumption is that layered and adjusted disclosure will improve peoples’ motivation and knowledge to financially prepare for retirement and take informed pension decisions. At the core of our multidisciplinary research project is working out and empirical testing that assumption. Two forms of adjusting communication will be elaborated and tested:
- a tailoring strategy: adjusting information towards demographic and socioeconomics characteristics of clients, like age, partner, income;
- a preference-match strategy: adjusting layered pension communication to clients’ needs for information and participation in pension decisions.
In collaboration with three partner organizations, adjusted pension information – like in the “uniform pensioenoverzicht” (UPO) – will be designed. Both in a survey study and in a lab setting, empirical research will be done into the effects in terms of the following variables:
- attitude toward pension information,
- comprehension of pension information,
- motivation to think about financial prospects
- intention to financially prepare for retirement (planning)
- behavior in terms of:
- visiting a digital pension tool
- comparing different financial prospects
- taking financial decisions concerning preparation for retirement
In the literature, financial literacy is regarded as an important variable affecting comprehension, motivation, intention and behavior. Several authors in economics conclude that financially literate people are more likely to plan for retirement (Alessie et al. 2011; Lusardi and Mitchell 2014). In the humanities literature, there is some evidence that the general concept of literacy might be even more influential than financial literacy in particular (Lentz and Pander Maat 2014). In this proposal we will bring together concepts and insights from economics and humanities (i.e. research into language and communication) from three perspectives:
- to use expertise in language and communication in order to explore innovative options for the design of pension information
- to analyze relations between the design of pension information and the effects on clients’ processing of this information and resulting behavior concerning retirement preparation
- to explore the different components of financial literacy, including reading proficiency and vocabulary, and its relations with informed pension decision making.
