7. Pension communication
This chapter discusses possible ways to improve communication about pensions. Looking at past communication efforts in Slovenia as well as good practices from other OECD countries, it highlights some of the challenges and possible solutions to increase the understanding of the pension system and garner support for reform.
Communication about pensions is a key policy issue in Slovenia. To date, communication to raise awareness about pensions and reforms has generally failed to raise the public’s level of financial knowledge or gain support for much-needed reforms. However, pension reform is more important than ever. As outlined in the previous chapters, there are many actions the Slovenian authorities can take to improve the design of pension systems. However, achieving reform depends on communicating a strong case for that reform, so that key stakeholders support it. This calls for carefully planned communication campaigns with clear objectives that make use of innovative communication techniques and tools, as well as co-operation with key stakeholders.
While communication about reforms is important, it is also important to remember that communication should be an ongoing priority. Throughout life, individuals need to make many decisions that will affect their financial security in retirement. Decisions such as whether or not to take a job, divorce one’s partner, participate in an offered retirement savings arrangement – and if so, how much to save or contribute, which provider to choose, how to invest their savings, and how to allocate the assets accumulated to obtain a stream of income when retiring (OECD, 2018[1]). However, most people lack knowledge on the pension system and on even the most basic financial concepts such as interest rates or inflation (together referred to here as ‘financial knowledge’) to make those decisions in their best interest. Moreover, they may not have received the appropriate information from policy makers, regulators, supervisors, providers, employers, social partners or the media to assist them in making those decisions in their best interest. For this reason, ensuring ongoing communication with people about their potential retirement outcomes and choices should be an ongoing exercise that draws on key relationships, and communication tools.
This chapter outlines ways the Slovenian authorities can better communicate with key stakeholders and the public on the functioning of the pension system in general and the need for reform. The first section summarises the findings from an independent review commissioned by the OECD to look into how information about retirement and pensions has been produced and communicated over the years in Slovenia.1 The second section discusses the main challenges regarding pension communication. Based on the experiences of different OECD countries, it also provides examples of the initiatives, tools, and techniques that different stakeholders can use to communicate effectively with the public. The final section concludes with policy messages that draw on these examples applied to the Slovenian context.
This section summarises the findings from an independent review commissioned by the OECD to look into how information about retirement and pensions has been produced and communicated over the years in Slovenia.2 The review was carried out in 2020-21 and assessed the strengths and weaknesses of past communication efforts, with a view to identify potential improvements.3 This review was based on focused interviews with high-profile experts in the country as well as desk research on the topic.
7.1.1. Government communication on pension policies lacks a vision, strategy and resources
Pension communication by the government seems, to date, not to have been supported by a clear strategy. As such, much of the communication has been sporadic and responsive. The Slovenian authorities also have not had sufficient in-house communication expertise to appropriately manage communication campaigns.
The pension communication effort failed in 2011 when the government attempted unsuccessfully to pass reforms proposed in the 2009 white paper. The reforms failed due to a number of reasons. The proposed pension reforms were not seen as a priority compared to other changes that were underway at the same time. The reforms got less political backing than expected and ultimately became the subject of a public referendum. The government had too little time to design a communication strategy on measures that raised discontent. It eventually hired a private communication agency, who crafted an advertising campaign that was ill-conceived, and whose content was viewed to be offensive. In addition to that campaign, there were press releases, news conferences, interviews, two printed brochures, two websites (but none dedicated solely to the pension campaign), a generic email address for questions, and a free telephone number. Notwithstanding, the lack of a clear communication strategy from the outset contributed to the public not voting for the law and the reform was rejected.
The lack of a strategy for pension reforms in Slovenia has been exacerbated by a paucity of resources among the civil service. For instance, during the pension reforms in 2011, the communication strategy was left to a single communication officer in the Ministry of Labour, Family, and Social Affairs. When a campaign to support the referendum became essential, there were not enough communication resources in the government, necessitating help from an external communication agency.
7.1.2. There are some positive examples of communication…
Some examples of active stakeholder engagement include two public education campaigns by the Slovenian Government, the communication efforts by the Pension and Disability Insurance Institute of Slovenia (ZPIZ) and some efforts by private providers such as Modra zavarovalnia.
The Slovenian Government runs an awareness campaign designed to address the 15% gender pension gap. The “My Work. My Pension” campaign is run jointly by the Ministry of Labour, Family, Social Affairs and Equal Opportunities and ZPIZ. The campaign’s communication focuses on the general public and women in four age groups. Its key message is that people should think about the future. The campaign has a website featuring an online quiz aimed at women, an e-assistant to help with questions, and YouTube videos. The campaign also involves promotional videos, Facebook posts, events, a pension calculator, and press releases.
The second public education campaign is “ASI – Active Ageing of Workforce”, which is concerned with the problem of population ageing. It aims to combat the main challenges and low labour force participation of older people, including discrimination.
ZPIZ has a modern website with a simple system to navigate the content. The language is understandable, well laid out, and the website provides a pension calculator for people to find out their approximate public pension at retirement. The calculator requires information on age, a prospective retirement date and duration of periods resulting in pension build-up, such as employment or purchased periods. ZPIZ also has a public relations office that manages media engagements.
Private providers engage actively with members. Modra zavarovalnica, the pension provider for employees of the public sector, similarly has a website but has much fewer unique visitors per month than the ZPIZ site. Modra’s website has a calculator for supplementary pension entitlement as well as a calculator that provides information of potential tax savings due to contributions to the supplementary pension scheme. Other private providers also operate professional websites and communicate with clients, but they tend not to run active marketing campaigns, preferring to communicate via businesses to deliver workplace pensions and disseminate information to employees.
7.1.3. …but a lack of sufficient communication in some key areas
The independent review highlighted some areas where a lack of stakeholder communication continues to lead to communication gaps and missed opportunities for communication about pensions. These include engagement with the media, young people, and non-standard workers.
The independent review found that the media does report on pension issues. The press writes many articles about pensions each year. It tends to discuss the big issues around pensions, including the need for systemic reforms and the dependence of further economic growth on a more efficient use of labour. The media also often cites recommendations and reports from the European Commission and the OECD that warn of structural problems in the pension system. The press was particularly active in reporting about pension reforms throughout the 2011 pension reform campaign, criticising a number of key areas:
Workers’ inabilities to work until 65 in labour-intensive industries;
Risk to younger people’s employment if older workers are in the workforce for longer;
Leveraging the press is a key way for policy makers to guide the public debate on pensions. This can be via both the traditional media and through the digital media, which is becoming more prominent as a source of information. However, there is little by way of communication between policy makers and key figures in the press.
Young people are a key group that is not being reached. This is particularly worrying since the review of pension communication found near consensus among interviewees that young people have been losing trust in the system and do not expect to be able to live off their pensions when they retire.4 This is particularly the case for the young workers in the shadow economy and the young sole self-employed who work for one client, who are defined by the Slovenian Statistical Office (SORS) as precarious workers. Policy makers in Slovenia may not be doing enough to combat this area of concern. Pension communication is geared more toward traditional media and less in media with which younger people tend to engage, like social media. The language of pension communication also tends to be too complicated for the younger population and does not grab their attention.
Many self-employed workers and owners and employees of small businesses save little for their voluntary pensions and little is done to attract them to saving. Employees of the shadow economy are also excluded from the pension system. The review links this with their low levels of income and their low trust in the political system in general, and in the pension system in particular. Again, little is being done to engage such individuals and encourage them to prepare actively for retirement.
Finally, it is important to note that a criticism of previous reform processes highlighted by the review of pension communication is that the government did not engage with or take into account the views of key stakeholders. This has accelerated the demise of many reform efforts.
7.1.4. The public has low levels of trust in the Slovenian Government
Public opinion polls and surveys reveal low levels of trust in government in Slovenia. A poll conducted by Valicon, called the “Slovene mirror”, reports trust in institutions and occupations in Slovenia. It showed that the public distrusts politicians, government ministers, and public officials more than any other occupation. These trends have persisted over many years. Furthermore, according to a recent Eurobarometer survey by the European Parliament, most Slovenes perceive that the country is going in the wrong direction and are among the most pessimistic European country in this regard (European Parliament, 2020[2]).
7.1.5. Recommendations from the review of pension communication
Based on the reform attempts from 2009-12, one could learn the following lessons:
When undertaking reforms, the government should carefully consider whether pension reforms should be packaged with other reforms or undertaken individually.
Early communication on pension reform is essential to raise public awareness, and this should be recognised by senior government officials.
The government and civil service should dedicate the time and resources to set up successful communication campaigns, and should undertake training to prepare them for this role.
There is a need for a proper organisation, sufficient staff, and a dedicated budget for a public information and education campaign.
The process of building consensus on the case for pension reform should start early. This would include engagement across the political spectrum and with social partners.
Six major areas of policy change for pension communication follow through from the analysis:
Pension communication must be seen as a key element of pension policy. It should account for the knowledge, attitudes, and behaviours of the population and should reflect a long-term process.
Pension communication must start with listening and should be evidence based. Financial literacy programs, national pension communication campaigns, and initiatives targeted a specific groups should be based on comprehensive research on pension communication.
Pension communication should reflect different possible pathways (government directly to citizens, government to citizens via businesses, businesses to customers, etc.).
Pension communication must become continuous. Building trust in authorities and developing financial literacy takes time and requires a long-term initiative that communicates with people at different stages of life.
Pension communication must get a mandate, organisation and resources. A centralised communication entity employing communication professionals should be established. That entity should build a portal for people to view their contributions and potential benefits. That entity should also develop and co-ordinate national financial public education campaigns and other communication initiatives.
This section outlines the needs of different key stakeholders that the analysis from past communication experiences in Slovenia and international experiences suggest. As highlighted in Section 7.1, the Slovenian authorities face a number of ongoing communication challenges. To date, they have lacked the skills, resources, and strategies to run effective pension communication campaigns and have therefore failed to gain public support for pension reforms. Furthermore, not enough is being done to raise awareness about the pension system, people’s future retirement incomes, and the consequences of different choices.
All the stakeholders in the pension system play a role in communication, from policy makers, administrations, regulators, supervisors, and international organisations like the OECD, to providers of retirement savings plans, employers and other social partners, the media, as well as academics and experts. Different stakeholders have different roles. This section explores the different communication options for some of the key stakeholders in Slovenia, based on international experience.
7.2.1. Stakeholders and their role in communication
This section explores the communication role of key stakeholders. These are policy makers, pension providers, employers and social partners, the media, and members of the public.
Policy makers, including administrations as well as regulators and supervisors of private pension funds, need to ensure that individuals are informed about pension systems and reforms. They also need to ensure that people receive the right information about their prospective retirement incomes, and that those people will take action in response to the information they receive. As such, policy makers can have a role in communicating directly with the public, which can be through initiatives such as national pension communication campaigns or by making available tools such as pension statements, calculators, and dashboards. Policy makers also have a role in regulating the communication and tools that pension providers use, which can overlap with those that policy makers can make available.
Like policy makers, private pension providers’ needs are to inform members of their pension rights and to encourage them to engage further with their pensions. They may sometimes face conflicts of interest as their interest may not coincide with those of members, especially when members can change providers. Regulators and supervisors need to make sure that potential conflicts of interest do come out.
Employers and social partners have a role in providing employees with direct financial advice that is tailored to members’ needs, and they can be involved in decisions to offer supplementary pensions. There is therefore scope for greater collaboration between social partners and policy makers to secure better retirement outcomes for individuals.
The media is a key stakeholder with a need to disseminate important information to the public, and policy makers should aim to better influence the public communication on retirement through better engagement with the media.
Members of the public have specific communication needs that policy makers and pension providers should bear in mind. Namely, they are generally disengaged from retirement decisions and special care needs to be taken to reach them and get them to engage with their pensions. Furthermore, how information is presented can have a bearing on whether people understand messages and take action in response to them. It is also important to bear in mind the key groups who have specific needs when planning for retirement, and to tailor communications to them.
Policy makers
Policy makers are the main stakeholder when it comes to communicating on pension policies and reforms. They have a role in ensuring that information on existing pension policies is available to the public, that the information provided is clear and understandable, and that individuals take action in response to the information. This is an important issue in Slovenia, since the research shows that very few people understand the pension system.5 Communication with people on their potential retirement outcomes, as well as how they can boost future retirement incomes is increasingly important to allow people to prepare for their retirement. Policy makers also play a role in disseminating information on potential pension reforms. This is similarly a key issue in Slovenia, where recent attempts at reform have failed because the communication was haphazard and poorly targeted, as discussed in Section 7.1.
This section outlines the initiatives and tools available to policy makers to communicate on pension policies and reforms, drawing on experiences of other OECD countries. National pension campaigns encompass the main initiatives policy makers can adopt to disseminate information about pension policies and reforms. Key tools include those that provide pension projections. The term ‘pension projections’ encompasses a range of means to help people understand the most probable value of their future retirement income or their future accumulated savings. Pension projections can be part of pension benefit statements, pension calculators, dashboards, etc. This section will explore some these tools and outline examples of their use from OECD countries.
National pension campaigns
National pension communication campaigns (NPCCs) are useful initiatives to explain how the pension system works and any reforms that may be underway. Communication campaigns should be part of an overall national strategy for financial education aimed at improving the financial awareness and literacy of the population, as recommended in the OECD/INFE High-level Principles on National Strategy for Financial Education endorsed by G20 leaders (OECD, 2012[3]) and in the OECD Recommendation of the Council on Financial Literacy (OECD, 2020[4]). However, in addition to NPCCs that are used on an ongoing basis, major events, such as pension reforms and crises, call for specific NPCCs to explain proposed policies clearly. Policy makers face a major public policy challenge to ensure that people are adequately informed about changes in the pension system, the impact of those changes on their pension benefits, and the options they face to improve their financial well-being in retirement. The period around a reform is also an opportune time to improve individuals’ knowledge about a pension system and influence their individual behaviour, as it often coincides with heighted public demand for pension information.
OECD research has shown that national pension communication campaigns are effective when designed according to clearly set and measurable objectives (OECD, 2014[5]). These objectives may be defined by governments, pension supervisory authorities or other public entities, possibly in consultation with stakeholders. Objectives may be to build consensus around the need for reform, to raise public awareness about pensions, to strengthen public trust in pension institutions, to improve people’s understanding and knowledge about pensions or to influence individual behaviours with respect to pensions. They can be linked to systemic pension reforms (e.g. increasing retirement ages or the introduction of automatic enrolment) or have one-off (e.g. gaining public support for parametric changes) or ongoing (e.g. improving knowledge about the pension system or promoting personal savings) objectives. They may also cover the pension system as a whole, or only a specific component (e.g. the voluntary funded system).
Campaigns are frequently divided into stages, according to the objectives, the date the reform is implemented, and when the new system begins to pay benefits, among others. For example, in the case of Estonia and Sweden, the purpose of a first NPCC was to raise awareness of the reform in advance of its implementation and to build trust in the new system. Closer to the implementation date, a follow-up NPCC was used to remind those affected by the reform about their new responsibilities and to explain their choices, for example in relation to the provider and the investment choice, where relevant (OECD, 2014[5]).
There is a range of potential distribution channels for use in NPCCs, and those potential channels are extensive and evolving.
Traditional media: Including television, radio, newspapers / journals (independent articles, placed articles and advertorials), and press releases.
The Internet: Public authorities may devote a section of their own website or have a dedicated website to communicate information about the pensions system. In some cases this will be the result of collaboration between public authorities and private providers. The site communicates information and might also encourage member engagement through the provision of a pension calculator, among other tools. Information may also be disseminated through banner advertisements, pop-ups, video-clips and other web-based applications placed on other websites, and through social media such as Twitter and Facebook, for example.
Printed material: This includes leaflets, guides, and wall posters, for example, which may be disseminated in a range of ways, including as billboard advertising, on public transport or in public places: Libraries and citizens’ advice bureaux, among others. Box 7.1 provides examples of campaigns that relied on printed materials in Finland and Norway.
Mobile phones: A more recent addition and considered useful during holiday periods and also to reach younger people.
Education establishments: University/school events and courses run within a curriculum are a growing trend. These may be provided within a national financial literacy strategy.
Outreach events: including workplace events, public seminars, workshops and roadshows (OECD, 2014[5]). International examples of outreach programmes are presented in Box 7.2.
Finland
Before the 2017 pension reform, the Finnish Centre for Pensions produced an information booklet on the reform. The booklet briefly presented the main components of the reform (changes in accrual rates, increasing retirement age and link to life expectancy, the introduction of the partial pension, and of an early retirement scheme in case of long-term arduous employment). It also explained why these reforms are needed, arguing that it is supposed to secure the ability to pay pensions also in the future with increasing life expectancy. Third, the booklet also clarified the objective of the reform: extending working lives and improving intergenerational fairness. The booklet was tested via a survey experiment ahead of the campaign launch (Kangas et al., 2021[6]). The experiment showed people who received the booklet had the feeling they had a better understanding of the reform, and perceived the reform as fairer than people who had not received the booklet. Yet people who read the booklet did not perform better on the knowledge questions about the reform. This suggests that most people had already picked up information on the main components of the reform through other channels, such as media reports. The feeling of knowledge about the reform was lowest among people who said they had received the booklet, but had not read it – although they performed equally well on the knowledge questions as others. This indicates the existence of a group of people who are hard to reach through information campaigns.
Norway
At the end of 2010, the Norwegian Labour and Welfare Service sent out a brochure on the pension reform taking effect on 1 January 2011 to all people who would become entitled to a pension after that date. The brochure explained the most important aspects of the reform: the introduction of flexible retirement with pension benefits being adjusted to life expectancy and when one starts drawing a pension. It also presented the wider pension system and gave a brief overview of both the old and the new regulations. Further, the brochure explained where to find more information and how to reach out with questions, invited people to access the online pension dashboard to check their pension build-up and provided information on how to do so. In 2012, a survey experiment was set up to measure the impact of the brochure in which a random selection of people again received the same brochure they had already received two years earlier. As such, the experiment measured the impact of receiving a reminder. People who received the brochure in the experiment (i.e. received the brochure for the second time) had better knowledge about the reform, although they did not change their retirement expectations (Finseraas and Jakobsson, 2014[7]). They were also more likely to think that the reform made the pension system easier to understand, which was one of the main objectives of the reform (Finseraas and Jakobsson, 2014[8]). A follow-up study, however, showed that the effect of the brochure on knowledge about and ease of understanding of the pension system had disappeared four months later (Finseraas, Jakobsson and Svensson, 2015[9]).
Outreach communications exercises are distinguished from passive channels, such as poster, radio and television, because they engage directly with the public and facilitate a two-way dialogue. An NPCC carried out in Singapore, for example, included 90 outreach events (road shows, public talks, and “meet the people” sessions) staffed by representatives trained to answer member queries. Similarly, an Estonian NPCC included a call centre, investment fairs, and road shows. The 2007-8 NPCC in Hungary launched an internet debate about the reform (using civic platforms), which aimed to ensure communications exercises in order to avoid misunderstandings. In Mexico the NPCC organiser’s agents visited employers, universities, trade unions, and associations; while at “fairs” the pension authorities, AFORES (private pension providers) and other pension-related institutions gave information to employees on the pension system (OECD, 2014[5]).
National pension campaigns could be organised by the responsible administration, or by an independent body monitoring the pension system. For instance, in both Finland (Finnish Centre for Pensions) and France (Conseil d’Orientation des Retraites), the independent body that is responsible for monitoring pension developments, including the financial sustainability of the pension system, is also tasked with informing the wider public about the pension system. Assigning the responsibility to inform the public to these independent bodies may help generate more trust in the information communicated, particularly in a context where debates on pension reforms are highly politicised.
Communication campaigns have a broad reach by nature but governments may also target them at specific audiences. This could be the case for pension reforms affecting only a portion of the population, or could be a design feature of the communication campaign to address population sub-groups differently in order to achieve better outcomes. In this context, it is relevant to bear in mind that some groups are likely to face specific challenges in planning for retirement, so they may need special attention in campaigns to build their financial literacy skills. These include young people, women, pre-retirees, and the self-employed (as discussed in the section on Key groups typically experiencing information gaps).
Information should be disseminated in a co-ordinated fashion when several stakeholders are involved in a campaign, and phased campaigns may be useful to avoid the confusion created by multiple messages. Focused campaigns are more likely to achieve their goals. When private providers or employers are involved in a national campaign, public authorities need to co-ordinate the dissemination of information to avoid creating confusion. In this context, it may also be relevant to delay private pension providers’ sales campaigns while a pension communication campaign is in progress, to ensure that marketing campaigns of private operators do not overshadow government information (Atkinson et al., 2012[10]).
A robust evaluation process should form part of the communication campaign to analyse the effectiveness (impact) of the campaign and its efficiency (cost-benefit analysis). The evaluation process should include pre-campaign research and regular monitoring of the campaign via both quantitative and qualitative tools.
Pension statements
Pension statements are summary documents of pension savings or entitlements, designed to inform people of their entitlements and potentially how to improve their financial situation in retirement. Pension statements provide basic accounting information such as an individual’s current pension balance, contributions paid, fees deducted, asset allocation, along with general information about the pension plan. Some may also provide projections of what people will receive at retirement based on current assumptions. Box 7.3 presents an overview of pension statements and their content in several OECD countries. Providing those projections is aimed at improving pension planning, which can entail an adjustment of retirement expectations or a change in people’s behaviours, such as increasing voluntary savings or labour market participation.
The role of policy makers in pension statements can be either to send out the pension statement itself, or to influence or regulate what providers include in the pension statements they send, such as the methodologies or assumptions used for pension projections. When policy makers send out pension statements, they should ideally aim to combine all pension information relevant to the individual, incorporating information from all pension sources (OECD, 2014[5]). Examples of countries in which the government directly sends pensions statements to individuals are outlined in Box 7.3.
Mexico
In Mexico, the pension supervisor, CONSAR, sends the pension statement. The statement includes three examples of amounts that would have to be contributed on a monthly basis until retirement to meet different monthly retirement income levels. The statement includes encouraging text such as “You can improve your future today” and “The solution is in your hands” to entice people to take action. It also includes a simple form for people to make additional voluntary savings and presents methods for additional savings such as using a dedicated website and at some convenience stores.
Sweden
Sweden sends out a yearly pension statement known as the ‘Orange Envelope’ to all insured persons and pensioners, although its format has changed over the years. Currently, insured persons receive a two-page statement with the first page giving the value of the NDC pension and the personal pension (DC) before last year, their evolution over the last year and their current value. It also provides information on the performance and administrative fees of a person’s personal pension funds and of the average pension fund in Sweden. The second page gives information on pension contributions made over the last year. In a previous version, the Orange Envelope also included benefit projections at different retirement ages, but this is now replaced by an online dashboard. According to a survey conducted by the Swedish Pensions Agency, four out of five recipients opened the Orange Envelope and considered the information provided as sufficient; three out of five said that the contents of pension statements were easy to understand (Kritzer and Smith, 2016[11]).
Germany
All people aged 27+ with at least five years of contributions, a requirement to qualify for a pension, receive a yearly pension statement in Germany. On the first page, the statement gives the date from which one can start drawing a pension, as well as three monthly pension amounts: the amount of the disability pension one would receive if one were to become fully incapacitated at the moment of receiving the statement, the amount of old-age pension one would receive if not making any more contributions, and the old-age pension one would receive if one continues to work as before. Further, the statement also shows the amount if pension benefits were to be uprated by 1% and by 2% per year, and includes a note on inflation. The second page gives an overview of the points-based pension system and notes that retiring earlier or later impacts the pension benefit. Furthermore, it shows the amount of employee and employer contributions that have been made and the number of points the individual accumulated. The person is warned that benefits can change depending on demographic developments, and that inflation would result in lower purchasing power for the same benefit level.
Canada
The Canada Pension Plan benefit statement is available online or upon request. A two-page document, the first page gives an overview of contributions paid and pensionable earnings for each year, as well as a series of estimated monthly pension benefits. For old-age pensions, it presents the amount of pension accrued until now, as well as the estimated pension if one were to work until age 65, 60 and 70, respectively. It also contains information on estimated disability and survivor’s benefits in case of incapacity or death, respectively. The second page contains instructions on what to do in case any information on the first page is missing or incorrect.
The United States
The Social Security Statement is available for everyone to view online, and is sent every year by mail to workers over 60 who do not have an account on My Social Security, three months before each birthday. There are three types of statements: one for ‘young workers’, one for ‘mid-career workers’ and one for ‘workers near retirement age’. Young workers are workers who have not collected the 40 credits necessary to open an entitlement to an old-age pension yet. They receive a note saying 40 credits are necessary for an old-age pension, and the amount of credits they have collected so far. Mid-career workers and workers nearing the retirement age receive pension estimates if they continue working at the current earnings rate until age 67, 62 and 70, respectively. The statement shows expected disability and survivor benefits. The statement also gives an overview of how the estimates are made, of contribution records by year, contact information of the Social Security Administration in case any information is missing or incorrect, and some general information on Social Security. Finally, for young workers, the statement includes a supplement detailing why they should already start thinking about retirement, and why Social Security is important to them. It stresses that they are already protected against disability and death, and repeats the promise of an old-age pension under the header ‘Promise of security’: ‘It is true that Social Security faces financial problems, and action is needed soon to make sure the system can continue to pay approximately the same level of benefits. Social Security has been a contract between generations since 1935, and America has always kept the promise of security for workers and their families.’ For workers nearing retirement, the statement contains a supplement with more information on how early and delayed retirement impact benefit levels, some data on life expectancy at age 65, and information on combining work and pensions.
While directly sending pension statements to people is a good way for policy makers to centralise pension communication and control the messaging, in many cases policy makers tend to be more involved in setting standards for the statements sent by pension providers. This is the case in Slovenia, where the assumptions used to compute pension projections must be set following rules defined by the relevant government agencies. Notwithstanding, the government does not provide guidance regarding the design and content of those pension statements. Indeed, such matters can be crucial to prompting engagement with pensions. As discussed in Section 7.2.2, how information is presented can have real consequences for whether individuals take action in response to that information.
Notwithstanding whether policy makers or pension providers send the pension statement, it is important to follow key principles. To be most impactful, the statement should present a clear and simple summary of key facts on the first page. Policy makers should avoid information provided purely for the purpose of regulatory “accountability” and “transparency”, as this does not readily translate into member empowerment. The most important figure to highlight is projected monthly income, although other information such as projected fund value at retirement can also be presented (OECD, 2014[5]). The statement should also include information about how individuals can improve their retirement income situation, in a way that is easy to understand and implement.
Still, there is a lack of consistency across the OECD when it comes to pension statements, and there have been recent efforts to better influence the design of pension benefit statements. For example, the International Organisation of Pension Supervisors (IOPS) has developed draft Good Practices for designing, presenting and supervising pension projections, which were recently the subject of a public consultation process.6 Similarly, the European Insurance and Occupational Pensions Authority (EIOPA) has created two model Pension Benefit Statements to provide practical guidance on how to implement the annual information document that IORPs are required to send to their members following the implementation of the IORP II Directive. The model statements intend to show how to provide clear information to members on their pension pot to help them to make more informed decision about their retirement savings.
Policy makers can also require that pension statements follow guidelines that are more general. OECD research has shown that organisers of pension statements should set clear and measurable objectives, and the statement should provide clear and simple information about key facts. Moreover, the pension statement should be more than a passive document that delivers information; it should aim to engage people and encourage them to take active steps to improve retirement income adequacy by, for example, postponing retirement or increasing contributions. Whether the pension statement should provide pension projections is an open issue as policy makers need to evaluate the trade-off between simplicity and encouraging members to take active steps to improve their retirement income (OECD, 2014[5]).
Calculators
Personal information available online at all times are a good alternative to pension statements, although they serve a different target audience: those who are seeking out information on their pensions. Unsolicited information in the form of statements can prompt people to become more informed and act, but online information available on demand allows people to explore their retirement situation at their convenience (OECD, 2016[12]).
Calculators are one such online tool that provides pension projections, which can be used to inform people about their pensions, help manage their expectations, and influence their behaviour with regard to retirement planning. Like for pension statements, calculators are mostly provided by pension schemes or funds, but can also be offered by supervisors, government institutions, industry bodies, or non-government sites (Stańko, 2019[13]). Projections provided by calculators should aim to educate people about realistic values of their future retirement income and on the effects that certain employment and retirement decisions (e.g. the retirement age, contribution rate, length of saving time, level of risk) can have. Input variables are often pre-filled (as default variables) and can be changed by users. Examples of countries that have public pension calculators include Chile, France, Iceland, Lithuania, Mexico, Poland, the Netherlands, Sweden and Turkey.7
The calculators available in OECD countries are most commonly deterministic, individualised, and based on a single scenario. In many OECD countries, such as in Mexico, users of the calculators can change several assumptions, such as the discount rate, retirement age, fees, and so on. Calculators typically also provide estimates of monthly pensions and replacement rates (as a percentage of a worker’s current salary), as well as accumulated balances over time and generated returns. Some make it possible for users to investigate whether their current pattern of pension build-up and retirement saving will deliver on their retirement goals. If not, the calculator can provide information on extra monthly contributions they might need to reach a particular level of pension.
Few jurisdictions show different scenarios, while a stochastic approach is very rare. Such projections are used in the Chilean pension simulator created by the supervisor. In Chile, the stochastic simulator was developed by the Superintendence of Pensions (SP) and is available on the website of the Chilean pension authority (Stańko, 2019[13]). The Pension Simulator provides a customised projection of expected future pension (amount in real values). It incorporates a risk dimension through a stochastic process for pension fund returns and the annuity discount rate. The scenarios shown correspond to the percentile 5, mean and percentile 95 of a series of 2000 simulated draws of the pension funds returns and the annuity discount rate. It also allows members to change different parameters such as age of retirement, future voluntary savings, contribution density, taxable income, investment path, etc. to see the effect of such behavioural changes on their pensions. The returns data horizon used for the simulations begins in 1996 (the multi fund system started in 2002). The assumption is that the retirement product is a life annuity and its cost is incorporated in the annuity rate. The Pension Simulator is an interactive tool, so members can see the effects of applying different values. The user is informed about the expected pension at retirement and the risk associated with this forecast, including the probability of reaching their desired pension as well as the measures the user can take to improve the forecast such as postponing retirement, increasing voluntary savings, increasing consistency of contributions.
Most jurisdictions show pension projections from a single pillar at a time, but countries are increasingly providing combined pension projections. Countries such as Australia, Canada, Chile, Colombia, Denmark, Ireland, the Netherlands and Sweden make it possible to see projections of more than one retirement income pillar, so users can get a more complete idea of their potential retirement income. One of the most comprehensive projections are available on the Netherlands’ My Pension Overview (MPO), which collects pension projections on occupational benefits from different pension providers and adds the first pillar state (unfunded) pension to show the consolidated overview of both pillars.
Developing a pension calculator can be challenging in a fragmented pension landscape as information has to be provided by several entities and rules about accumulated pension entitlements may differ between schemes. The calculator on the Italian My Future Pension was launched in 2015 and covered all private sector workers by 2018, after which also public sector schemes began to be included. The French calculator M@rel (Ma Retraite en Ligne) was launched in 2017 and covered 97% of the insured by the end of 2019, with data from smaller pension funds still to be added.
The international experience can provide lessons for the Slovenian context. While in Slovenia, ZPIZ provides a pension calculator on its website, that calculator only makes it possible for people to approximate their public pension at the time of retirement. There does not appear to be a tool available to calculate potential benefits from supplementary plans. Furthermore, as discussed in Section 7.1.2 private providers do not tend to make these tools available either, leaving individuals without this important retirement planning and provider comparison tool. As such, there appears to be a communication gap that the Slovenians authorities can aim to fill. The launch of a pension calculator could potentially coincide with a national pension communication campaign designed around any upcoming pension reform packages.
Dashboards
A pensions dashboard provides a one-stop shop for individuals to see comprehensive details of their pensions. Depending on how the dashboard is designed, individuals may be able to see their public and private pension entitlements, compare different private schemes, enter personal information (such as a change of address) just once for transmission to multiple providers, receive regulatory and marketing communications, compare different pay-out options, and consolidate small pots. It may also facilitate obtaining comprehensive income projections from different sources.
A few OECD jurisdictions already provide comprehensive dashboards set up by the regulator or supervisor:
The Australian Tax Office portal provides up-to-date valuations of all an individual’s private DC pension accounts (superannuation) and of any unclaimed money in “lost” accounts. Individuals can trigger the process of consolidating multiple accounts simply and easily through the portal.
In the Netherlands, the government set up the My Pension Overview website, https://www.mijnpensioenoverzicht.nl/, in 2011 to increase engagement and awareness of pension entitlements. It calculates projections of potential monthly income from both state and occupational pension rights on both a gross and net of tax basis. The projections consolidate potential income from occupational pensions from different providers and as well as projections of the state pension and presents one monthly potential retirement income figure. The dashboard does not yet provide information on personal pension plans, although the government is doing work to examine the feasibility of doing so.
The Swedish minpension site, https://www.minpension.se/, was established in 2004 and has evolved to provide real-time information about NDC and personal pensions. It automatically collects pension information from a number of different pension companies. It shows the user the current value of pension entitlements, a projection of potential retirement income and a simulator to model changes in the projection at different retirement ages. Around half of eligible users are registered with the site and data suggests that people are most likely to use the site as they get close to retirement age. The dashboard is also available through a mobile application. Minpension also has Facebook, Twitter, and Instagram accounts, which it uses to draw attention to key pension issues and to entice followers to engage with the dashboard. The dashboard site also has a blog and a podcast (minPensionsPodden) where experts talk about issues affecting people’s pensions.
Denmark has a pension dashboard called PensionsInfo, https://www.pensionsinfo.dk/. Like the Swedish dashboard, it shows individuals’ potential income from public and private sources. The dashboard has a tool that allows users to modify parameters such as their retirement age and monthly salary. Based on the inputs, it then provides an estimate of retirement incomes from different sources. Users are able to click through the information to get more and detail on the projections.
The Belgian My Pension dashboard presents an overview of the individual’s career so far, with a detailed overview of periods of employment as well as periods of non-employment rendering pension benefits. It also presents the earliest possible date when the individual can retire with the monthly public pension benefit one is expected to receive if one retires at that moment, as well as the retirement date and the expected monthly pension benefit if one were to retire at the statutory retirement age. The platform also allows for a more detailed view of retirement ages and pension benefits. Further, it includes information on accumulated occupational pension entitlements for employees and the self-employed, as well as on how much one can still voluntarily contribute to their occupational pension.
Designing and launching a dashboard takes time and requires public authorities to collect comprehensive data from a range of sources. When Italy launched My Future Pension in 2015, 19 million people could access the tool consisting of a dashboard and calculator, particularly young people as they have had shorter careers. To launch the tool, 5.6 million of these people received an e-mail to invite them to access their dashboard upon and another 4 million people who were not previously registered on the Italian Social Security Institute’s website received a pension statement on paper with an invitation to register and access the dashboard. Over the course of three years, coverage of the dashboard was systematically expanded by adding information from different pension funds until virtually all employees and self-employed could assess the tool. Over this period, more than 3 million people logged into the website to check their pension, on average making 4.5 simulations per person. Since 2018, the dashboard has also been expanding to include civil servants, but the fragmented nature of civil servants’ social security funds makes this a slow process, particularly for more mobile workers (Boeri, Cozzolino and Di Porto, 2019[14]).
Setting up a pensions dashboard would be particularly useful in the Slovenian context, as many individuals find the system complex, inaccessible, and do not tend to understand or appreciate how supplementary pensions fit in with their broader retirement income entitlements. Furthermore, many people have multiple accounts. A dashboard could be a good way to alert people to those accounts and prompt them to consolidate them. However, as outlined in Chapter 5, the Slovenian supervisor does not collect comprehensive data from providers that would allow them to consolidate individuals’ entitlements. As such, the short-term goal for the Slovenian authorities may need to be data collection and consolidation, with the view to providing a dashboard in the longer term, once the data is available and a pension calculator has already been trialed.
Private pension providers
Private pension providers are responsible for disseminating information to their members, and as discussed, their roles can overlap with those of policy makers. In the experience of OECD countries, pension providers can provide pension statements and make calculators available, as can public authorities.
Pension providers in Slovenia are required to send their members annual statements, but it is not clear whether those statements are effective in encouraging individuals to take action to improve their retirement situation where relevant. The statements are required to provide information on accumulated assets, any guarantees, and retirement income projections. However, there is no guidance from the authorities regarding how best to present such information. It would therefore be worthwhile for providers to have access to guidance such as that discussed in the section on Pension statements.
In Slovenia, most pension providers seem to do little in terms of communicating with members of the public and making available tools like calculators. An example of one which does have a pension calculator on its website is Modra zavarovalnica.8 The calculator makes it possible for users to select the level of monthly premium, retirement age, and existing savings to determine their potential monthly retirement income. Modra’s website also has a calculator that allows users to calculate the tax they might save by contributing to the private pension account.9 While other pension and insurance companies provide general information on supplementary pensions, the information is relatively basic and many of their websites do not make available an interactive tool such as a calculator. A situation where few pension providers make available a calculator further reinforces the case for the Slovenian authorities to make one available for the public, to fill this key communication gap.
Slovenian pension providers do not appear to actively promote plans to members nor do they have easy steps to access pension plans. The review of Slovenia’s experience with pension communication flagged that pension and insurance companies view margins for supplementary insurance as low, so they prefer instead business-to-business communication. On pension providers’ websites, users interested in opening a pension account are invited to contact a representative from the company, which is not the best way to encourage take-up of voluntary pension products. Steps such as having to make phone calls may deter users from pursuing voluntary personal retirement savings, since individuals prefer simple steps such as online forms.
Not actively promoting pension products is a departure from common practices around the OECD, where pension providers tend to be more active in soliciting new business. Many run aggressive marketing campaigns to encourage individuals to save or to switch providers. For instance, Australian superannuation funds commonly run television advertisements as well as online videos from industry experts and financial planners. Similarly, many pension providers in OECD countries make interactive tools available to the public.
While it is difficult to create the incentives for private operators to market to individuals, this may change if the Slovenian authorities take steps to encourage greater take-up of personal pension plans, as outlined in Chapter 6.
Employers and social partners
When it comes to pension provision, social partners and employers can play a role in providing employees with financial education and advice about their retirement savings. The benefit of communicating through employers and social partners is that they tend to have a more intimate understanding of their workforce’s needs, financial situation, and financial literacy levels. As such, they can be well positioned to tailor retirement information and advice to their employees and members. They can also engage members more directly, through seminars, workplace financial advice services, conferences, and so on.
Since supplementary occupational pensions are voluntary in Slovenia, communication via employers can be a key way to boost complementary plan coverage. As outlined in Chapter 5, the relevant trade union decides whether a pension plan should be included in employees’ contracts, and if no union exists, the workers council decides. Therefore, social partners and employers are well placed to initiate discussions around retirement preparedness. Communicating with members about their potential retirement situations, as well as steps the social partners can take to improve future retirement adequacy, can help garner public support for supplementary occupational pensions, leading to genuine improvements in retirement outcomes.
In this regard, policy makers have a role in collaborating with social partners and employers to highlight the importance of such workplace initiatives. Policy makers can incorporate these initiatives into national pension communication campaigns. Such campaigns can involve issuing educational material directly to employers and social partners to explain the benefits of supporting their employees’ and members’ retirement preparedness. Policy makers can also host training seminars tailored specifically at educating and eliciting support from employers and social partners.
The media
The review of past pension communication suggests that the Slovenian media is interested in pensions and publishes regular articles on the topic, but to date the Slovenian authorities have not engaged actively with media players to guide the public discourse. The media is a key stakeholder in this regard, and its needs and role are to disseminate information to the public. It is important for the Slovenian authorities to engage key players in the media whenever it undertakes significant policy reforms or launches initiatives such as national pension communication campaigns and tools such as calculators or dashboards. That engagement with the media can include carefully tailored press releases written in a simple journalistic style that journalists can easily adapt to their audiences. Information sessions designed specifically to present key information to the media and answer their questions can also be a good way to communicate about reforms and raise awareness about policy makers’ initiatives.
7.2.2. Communication to members of the public
Members of the public have key communication needs when it comes to engaging with their pensions. Since they tend not to actively plan for retirement, extra efforts are often needed to reach them. Furthermore, communicating with individuals calls for simplicity, personalisation, and other methods that draw on an understanding of behavioural biases. Communication is also most effective when it succeeds in prompting people to take action with respect to their retirement savings. Finally, this section outlines which groups of people may require particular attention with respect to pension communication.
Reaching people
A key challenge when it comes to communicating with individuals is that people tend not to be open to communication about retirement, and do not wish to engage in retirement income planning. This is because people tend to have a present bias, and prefer not to think about retirement. As such, it is hard to get people’s attention in the first place.
Some theories suggest that attempting to communicate with people at times when people are thinking about the future may help get people’s attention (teachable moments). For instance, sending prompts on “round number” birthdays may be effective (Behavioural Insights Team, 2018[15]). Alternatively, life events, such as a new job, marriage, the birth of a child, divorce, the loss of a spouse etc., can represent the moments when people are more open to behavioural change vis-à-vis their pensions (Blakstad, Bruggen and Post, 2017[16]). However, a key challenge for parties trying to reach individuals at the right time is knowing about these life events and communicating with individuals at that time.
Alternatively, governments or pension providers can better reach people by making communication distinct. An example is the Swedish ‘orange envelope’ which the Swedish Pensions Agency sends annually to individuals and contains an overview of the entitlements individuals have earned so far from pension sources such as the national public pension and the premium pension. The envelope is distinct in that it is bright orange. It also contains large text on the front, which tells individuals that the contents allow them to see how they are doing with respect to pensions. The envelope is a cornerstone of communication to participants about the pension system, since the colour is eye catching the annual envelope has become well-known after 20 years of use.
Such findings that draw on behavioural studies can provide important lessons for the Slovenian context, since the research in the communication review has shown that most members of the public are uninterested and disengaged with their retirements, and more can be done to reach them.
Presenting information
Communication with individuals requires accounting for behavioural biases and techniques that aim to increase members’ engagement. Lessons from research in this area suggest the following important findings when it comes to presenting information to individuals.
It is important to convey messages to individuals in a simple way. For instance, one focus group study found that many people preferred to be informed of their expected pension in absolute monetary terms – for example “your pension may be EUR 1 200 a month” rather than “your pension may be 36% of your last salary” (Antolin and Fuentes, 2012[17]). Technical jargon and complex concepts should be avoided because they can have a counteractive effect of deterring people from engaging with their retirement savings decisions. NEST also provides a useful guide to words and phrases that represent a jargon-free approach, which it updates as it better understands its target audience. The guidebook offers alternatives to jargon terms that should be avoided. For instance, it suggests using “building your retirement pot” to replace “accumulation” (NEST Corporation, 2018[18]).
People prefer certainty and more personalised advice. Many people discount advice they perceive to be general, or assume that it does not apply to them. This is why respondents tend to prefer point estimates over ranges or confidence intervals. Using specific numbers seems more real, personal, and easier to remember. This is also why respondents prefer deterministic scenarios to stochastic ones. However, quite surprisingly, precise figures did not lead them to think that these numbers were firm or guaranteed (Sykes et al., 2008[19]).
Some evidence shows that individuals prefer text tables over graphs and numbers. One study shows that text tables (with highlighted retirement income) to present information on pension projections was more efficient in terms of comprehension, perceived clarity, decision-making ease, decision making confidence, and willingness to choose a drawdown product. Respondents in a study preferred text tables to graphs and number tables, most particularly women and younger (aged 45-54) individuals (Commonwealth of Australia and Department of Prime Minister and Cabinet, 2017[20]).
Individuals’ needs for simple communication can sometimes be at odds with the need to provide important messages such as uncertainty around numbers presented in pension statements. However, it is important that conveying uncertainty of pension benefits does not refer to more than the basic, underlying assumptions about the modelling. Rather, the communication should be simple. For example, uncertainty around deterministic benefit projection results could be conveyed with a warning such as “However, this amount is not guaranteed” or adding a worst case scenario warning: “If you suffer more unemployment and experience lower returns on investment, you should expect a monthly income at retirement of only X” (Antolin and Fuentes, 2012[17]).
Ways to prompt people to take action
In all communication, it is important to accompany negative information with steps to make people aware of how they can rectify a situation and to empower them to engage with that action. It is also important that people face simple steps to take action because even small roadblocks can put people off taking action. For instance, one study found that a simple but effective intervention was to change a link on a letter that asked people to file their taxes to an online form. The change saved people a single click, but considerably increased responsiveness (Behavioural Insights Team, 2018[15]).
Individuals tend to need carefully thought-out interventions in order to get them to act on their retirement needs. In a sense, this adds an additional layer to a communication strategy. Indeed, communication that motivates people to act is distinct to that which intends to inform people, and comes with its own challenges. Such a strategy can draw on behavioural science findings. Examples include:
The ‘head start effect’, which involves drawing attention to how a task has already been somewhat achieved. Presenting a task as being already partly accomplished and asking people to finish off the process, such as pre-filling a form and asking them to fill the gaps, can lead people to feel the goal is close (Behavioural Insights Team, 2018[15]). A related approach is to use “chunking,” which refers to presenting information or instructions as a series of small, manageable steps.
Relying on various experience, in line with a theory that individuals feel more confident when they see their peers succeeding at a task. Applied to the context of retirement savings, individuals are more likely to save if they perceive their peers doing so (Koposko et al., 2015[21]). Therefore, communication on retirement savings should rather focus on showing that people with similar jobs, employers, and life circumstances are saving. This suggests less emphasis on people not saving enough. Rather, when messages provide people with statistics of positive things others are doing this can be more effective, such as “9 out of 10 people have started saving for retirement” (Behavioural Insights Team, 2012[22]). There is also merit in telling people how they actually perform (in monetary terms) compared to their peers.
Using messages that convey confidence in an individual’s ability to save money. People who experience negative emotions when thinking about retirement planning are more likely to overlook the value of the activity and put it off (Behavioural Insights Team, 2018[15]). To avoid people feeling negative emotions, it is important to convey messages as positive opportunities. One way to do so is to use positive framing (e.g. “your retirement income is likely to be EUR 1 000 per month” and not “your retirement is likely to be lower than your current salary by EUR 700 per month”).
Exploiting on heuristics and biases to nudge people’s behaviours. For instance, retirement could feel like a closer goal when people see pictures of different ways people could spend their retirements. Other ways to make the future seem closer is to provide people visualisations that show people what the trajectory of their lives would look like if it took place over the course of 100 days, highlighting the day they’re on now and the day their retire (Behavioural Insights Team, 2018[15]). Similarly, individuals can be more engaged when they perceive benefits, and for those benefits to be immediate, such as a matched contribution or a reward for joining a programme. This is particularly the case when people perceive a reward in their hands rather than in a pension pot, such as by offering a lottery prize draw for joining a scheme.
Key groups typically experiencing information gaps
Some groups are likely to face specific challenges in planning for retirement, so they may need special attention in campaigns to build their financial literacy skills.
Young people, especially young workers, who need to be made aware of the benefits of saving early. They also need to be aware of the costs of holding money in multiple funds.
Women, who typically earn less over their lifetimes than men, have longer life expectancy, and consistently are found to have lower financial knowledge and lower confidence in their financial abilities than men (OECD, 2013[23]). They are also more likely to have career breaks due to maternity leave, so they need to understand the impact of pausing contributions on future retirement income.
Pre-retirees, who need to be aware of the choices that they will be faced with at retirement, such as when to draw on their pension, how to use any lump sum received and how to choose an annuity.
Self-employed, who often find themselves with inadequate retirement income since they pay less contributions to finance public pensions. The self-employed typically need to accumulate more voluntary retirement savings (OECD, 2016[12]).
It is important that policy makers bear in mind the specific needs of particular groups of people such as these, since they may require tailored communication campaigns to illicit their engagements with their retirements. Box 7.4 presents an example of communication campaigns tailored to different social groups in Finland.
The Finnish Centre for pensions runs regular campaigns to make people more aware of their pension rights and entitlements. Currently, it has an ongoing campaign in traditional media (magazines, radio) as well as on social media targeting people aged 45+ to invite them to visit the online pension dashboard with information on their pension entitlements and retirement ages. The campaign is designed both to convince people to inform themselves about their own pension and to make them think about their pension and retirement options. A second ongoing campaign is targeted at youth, and aims to inform young people about pensions and how they are calculated, how pensions are paid, and how their life choices (e.g. employment, studying) affect their future pension. This campaign is particularly run online, with a designated website (Eläkepätäkkä.fi) and on social media. A third campaign targeting self-employed is to be launched in the course of 2021. As self-employed people on average have lower pensions also in Finland, this campaign is supposed to inform them about their pension entitlements and aims to boost their pension build-up.
National pension communication campaigns can help fill information gaps around pensions and can help build a case for reform. National pension communication campaigns should be part of an overall strategy for financial education aimed at raising awareness and literacy of an overall population. Major events, such as pension reforms, call for specific national pension communication campaigns. Clear and measurable objectives should drive the planning, implementation, and evaluation processes of the campaigns. Phased campaigns should be used to avoid multiple messages. The more focused a campaign is, the more likely it will achieve its goals. Messages need to be short and simple, with complex details broken down and delivered in a series of communication phases. National pension communication campaigns should target communication at less accessible groups, such as the young, unskilled, etc. Designers of pension campaigns can develop outreach programs in partnership with a range of stakeholders to increase engagement.
Pension statements are useful documents but should be designed in a way that provides information clearly and engages people to take action. Pension statements should ideally combine all pension information relevant to an individual, incorporating information from all pension sources. Issuers of pension statements should set clear and measurable objectives. The statement should be more than a passive document – it should engage people and encourage actions to check, and if necessary, improve retirement income adequacy. It should focus on demonstrating the potential impact of different decisions such as postponing retirement or increasing contributions. For a maximum impact, the statement should present a clear and simple summary of key facts on the first page. The most important figure to highlight on the statement is the projected monthly income. Issuers of pension statements should introduce thorough evaluation processes to ensure the statements perform an optimal role in communicating key information.
Calculators and dashboards are good digital tools to engage people on their pensions and help them visualise the effects of different decisions. Written pension statements, as the sole means of communicating benefits, are inflexible and limited. This is why digital tools such as calculators and dashboards are increasingly important to communicate with people. They provide information on demand for people to explore their retirement situation. Calculators and dashboards are good ways to inform people about pensions and influence their choices with regard to retirement planning. Custom-built calculators, for instance those which illustrate the impacts of reforms, can also be useful ways to explain complex reform messages to the public. However, such tools, particularly dashboards, can require significant resources to set up and require careful planning, co-ordinating with different stakeholders such as private providers, and potentially long lead times.
Engagement with employers and social partners can help open communication channels to people. Collaborating with industry groups is a good way to reach people through their workplaces. This can be effective because it can make people more receptive to the information. Employers and social partners also tend to have a better understanding of members’ needs, making it possible to better target communications.
The media is a powerful channel to disseminate messages about pensions and reforms. The traditional media is a key player when it comes to disseminating information, and its messaging can be particularly critical to the success of pension reforms. Strategies for national pension communication campaigns should therefore consider leveraging the power of the press. A positive relationship with the press can be beneficial and can help reinforce the government’s message. Active engagement with key players in the media, such as through targeted press releases, information sessions, and bilateral relationship building are important ways to elicit backing from the media and ensure the messages it disseminates are accurate.
Using different communication channels can help reach more people and tailor messages to different audiences. Communicators can use different channels like social media or traditional media, to convey messages. Traditional media like reviews, conferences and newspapers, can be useful to inform experts on what to communicate. Social media (including influencers) are important nowadays as many surveys show that young and middle-aged generations get most of their information from social media and not from traditional media. Yet, the language is more important than the channels, which is why influencers can be quite useful.
Communication language is crucial. A key principle when it comes to communication is that there should not be an expectation that people should understand, but rather that communicators should make themselves understood. In this respect, the approach taken to reach people, how information is framed, and the ease of actions to be taken can significantly affect whether communicators are making themselves understood. Messages to people about their pensions can therefore draw on findings from behavioural science. Finally, communication language should often be adapted to the needs of particular groups such as young people, women, or the pre-retirees.
Policy makers should account for people’s behavioural biases when communicating with them. OECD work assessing international experience has identified approaches that account for low financial knowledge and behavioural biases in order to improve the financial security of people in retirement. Automatic features, default options, simple information and choice, as well as financial incentives, financial education and adequate communication help people make better choices to strengthen their financial security in retirement (OECD, 2018[1]). Pension statements can convey key information and in a simple manner, while financial education seminars and financial advice can help people understand the information.
Communicating to people the choices and the consequences that their actions can have on their financial security in retirement is essential. Adequate and proper communication helps people make choices, informs them of the effect of their choices, and allows them to understand the stakes of inaction. A key objective of communication initiatives can be to inform people of the choices available to them and of the implications of such choices. In this regard, a related objective is to elicit pro-active behaviour from people. People can make choices to improve their financial security in retirement when they understand the implications, choices like contributing more or postponing retirement. Communication is also important to make sure people understand the consequences of inaction, in particular in a changing world with population ageing and increases in life expectancy, and an environment characterised by low growth (economic, productivity and wage growth) and low returns to investment.
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[5] OECD (2014), “Pension communication: Pension statements and national campaigns”, in OECD Pensions Outlook 2014, OECD Publishing, Paris, https://dx.doi.org/10.1787/pens_outlook-2014-8-en.
[23] OECD (2013), Women and Financial Education: Evidence, Policy Responses and Guidance, OECD Publishing, Paris, https://doi.org/10.1787/9789264202733-en.
[3] OECD (2012), OECD/INFE High-Level Principles on National Strategies for Financial Education, https://www.oecd.org/daf/fin/financial-education/OECD-INFE-Principles-National-Strategies-Financial-Education.pdf (accessed on 15 March 2021).
[13] Stańko, D. (2019), “Design and Supervision of Pension Projections in 26 Jurisdictions”, IOPS Working Papers on Effective Pensions Supervision,, No. 34, http://www.iopsweb.org.
[19] Sykes, W. et al. (2008), Understanding responses to pension forecasts: qualitative research.
Notes
← 1. The full independent review is available upon request.
← 2. This independent review was carried out at the request of the OECD by Dr. Dejan Verčič, Professor, Head of Department of Communication and Head of Centre for Marketing and Public Relations, Faculty of Social Sciences, University of Ljubljana, and Partner and Knowledge Director at Stratkom.
← 3. As this section summarises the independent review of pension communication, it does not represent the official views of the OECD or its member countries.
← 4. This lack of trust exists despite there being a youth trade union organisation (Trade Union Youth Plus) within the largest trade union federation in Slovenia (The Association of Free Trade Unions of Slovenia – ZZZS) which openly advocates for the defined benefit state pension, arguing that it is the only fair option for today’s youth.
← 5. As discussed in Chapter 5, a survey as part of the “My Work, My Pension” campaign found that only 21% of respondents stated that they believe they know the pension system well, 13% agree that the system is simple, 22% that they are given enough information to make relevant decisions.
← 6. 2021-Public-Consultation-Good-practices-pension-projections.pdf (iopsweb.org).
← 7. For links to the calculators, see Box 2 of Stanko (2019[13]).
← 8. https://www.modra.si/informativni-izracuni/izracun-dodatne-pokojnine/.