Activating pension plan participants: investment and assurance frames

Whereas pension reforms take place and populations grow older, most pension plan participants are inactive and do not take the time to examine their retirement savings situation. An important challenge that policymakers and pension providers therefore face is how to communicate effectively in order to foster greater awareness of the importance of pensions. In this paper we analyze the difference that communication framing can make in activating individuals. We first show that loss frames can be a powerful nudge, but that they also result in more negative emotions and evaluations compared to the gain frame. Second, we therefore develop two frames for pension communication, which tap into similar gain and loss mechanisms while avoiding the use of loss wording. The investment frame – the gain alternative – emphasizes that pension plan participants can gain by investing in their future and searching for information. By contrast, the assurance frame – the loss alternative – stresses that participants can prevent negative consequences through the sense of security that they obtain when learning about their expected pension benefits. We tested these two frames in the field with 7,315 participants of a defined contribution pension plan and found that assurance framing can be twice as effective in engaging participants to click on a movie link (explaining pension scheme changes). With these frames, we found no differences in evaluation or negative emotions.