Research

Working Paper

A Fistful of Dollars - Financial Incentives, Retirement Information Search and Savings Behavior

A lack of pension awareness undermines adequate savings decisions. To understand what motivates individuals to become informed about their pension situation, we conducted two field experiments with 226,946 and 257,433 pension fund participants, respectively. We find that lottery-type financial incentives to visit an online personal pension planner substantially increase the rate at which individuals check their pension information. Offering a few large prizes rather than many small prizes is most effective. However, the uptake of pension information does not lead to improved pension knowledge, nor to increased savings behavior three weeks after our intervention.

Following the Rating? How Mandatory Information Disclosure Affect Retirement Income Product Choices

Voluntary annuitization from defined contribution pension plans is uncommon, and in many countries, retirees self-insure against retirement risks by holding on to and even building up assets. Lack of awareness of retirement income products and their design and financial impact is a key reason for low take-up of annuity products. Using an online discrete choice experiment we test how a Fact Sheet presenting standardised information on key product features - income, risk, access to capital and death benefits - affects stated choices from a menu of annuity, phased withdrawal and bundled retirement income products. Our setting is Australia where retirees can choose how to decumulate their retirement savings. When using the Fact Sheet, participants chose the lifetime annuity and bundled annuity products most often, which is contrary to the actual behaviour of Australian retirees who predominantly take phased withdrawal products. Of five Fact Sheet information items, choices were mostly driven by the Product Rating (a 1-7 rating of protection against a fall in income due to inflation, market and longevity risk) and Average Annual Income. The lifetime annuity and the bundled lifetime annuity/phased withdrawal products were more likely to be chosen where Fact Sheets used graphs and tables to present information, and where the Product Rating is more salient. However perceptions of risk and control were more important to product choices than actual product knowledge or understanding of the Fact Sheet information. Our findings suggest that Fact Sheet information items, especially the prescribed Product Rating and the associated information on inflation, longevity and market risk decisions drive both perceptions and choice of retirement income product and must be carefully designed.

Work in Progress

“Yes, We Know! The Relationship between Confidence in Pension Knowledge and Retirement Savings Decisions”, with Rob Bauer, Adam E. Greenberg, and Paul Smeets.

“Impact or Responsibility? Giving Behavior in a Televised Natural Experiment”, with Martijn van den Assem, Dennie van Dolder, and Paul Smeets.

“A Meta Analysis of Social Norms”, with Jenna ter Meer and Paul Smeets.

"Super and Mortgage Decisions" with Hazel Bateman, Christine Eckert, and Susan Thorp.

"Understanding members’ behaviour responses to market volatility'', with Hazel Bateman, Jacki Ellis, and Shang Wu.

"The development of a new app-based assessment of shared financial decision making'' with Brooke Brady, Craig Sinclair, and Joseph Phillips.