Regulatory Alerts2022-10-19
Communication on Pension Amounts: A Study on Interpretation and Understanding
The Dutch Authority for the Financial Markets (AFM) commissioned a study to determine whether communicating both pension wealth and expected payouts during the transition to the new pension system improves participant understanding and trust. The research found that communicating only the expected payout creates an overly positive and inaccurate expectation of pension wealth, whereas providing full information leads to more realistic, albeit sometimes negative, assessments. However, a significant portion of participants, particularly those with lower education or further from retirement, find the information difficult to understand regardless of the format, suggesting a need for layered communication strategies.
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