More than numbers: How communication can support pension decision making

Abstract

Pension participants in the Netherlands face complex decisions while the stakes are high. ‘Wrong’ decisions (i.e., decisions that do no match participants’ interests) can have undesirable consequences for the individual participant (e.g., a low or even insufficient pension benefit, or, alternatively an unhappy personal life) and ultimately for society at large (e.g., citizens in poverty or dissatisfied citizens). Therefore, adequate decision support is required. This dissertation examined how communication can enhance appropriate pension decision making. In contrast to the pension domain, extensive research has been conducted in the medical domain on decision support. Parallels between pension decision and medical decisions formed the basis for a literature study aimed to apply lessons from the medical domain to pension decisions, such as the relevance of Fuzzy-Trace Theory (FTT) as theory for decision making and the potential suitability of Value Clarification Methods as a type of decision support. The assumption of FTT is that in decision making, people rely on the gist of information as opposed to verbatim details. This means they boil down information about the decision (such as the consequences of the decision alternatives) into a meaningful difference for themselves. This requires them to take various dimensions into account that might be affected by the consequences of the decision alternatives, whereas pension information is usually presented one-dimensionally (exact monetary amounts related to the decision alternatives). Based on interviews with pension experts and participants, a number of dimensions have been identified for pension decisions: life expectancy, (in)sufficient income, financial maximization, work-life balance, and job satisfaction. Three types of decision support interventions were then designed, with the dimensions that emerged from the interviews as input: a) a traditional pros and cons text, b) a Value Clarification Method (VCM), and c) testimonials. The interventions were examined in two experimental field studies with pension participants (N = 2.328, N = 500) to assess their effectiveness in decision support. The first study showed an activating effect of the VCM and the testimonials, while the second study found no clear differences. Finally, interviews were conducted to gain more insight into how people perceive and reason about parties that communicate about pensions in the (Dutch) pension field, such as employers, pension providers, and the government. The perceived trustworthiness of these sources can affect effective decision support. Participants trust their employers and acquaintances, but question their expertise, while they consider the pension providers and the government knowledgeable, but distrust their motives. As to building trust, face-to-face communication appears to be an important medium. This research provides valuable insights for designing and examining communication intended to support pension decision making and can serve as an inspiration for future studies on pension communication.