Challenges in the Digital Provision of Pension Information

ANALYSIS REPORT MAY 2025 Challenges in the Digital Provision of Pension Information

In Brief Pension providers are increasingly providing legally mandated information digitally to participants. This is a positive development (among other things, better for the climate and cost control), provided that the information reaches participants (in time). In this report, we provide five guidelines for pension providers so that they can ensure good (digital) reach of legally mandated communication.

ANALYSIS REPORT Table of Contents Summary 3 Research Design and Legal Framework 5 Research Design 5 Legal Framework 6 Five Guidelines 8

1. Serve every participant via their own preferred or standard channel 8
2. Check email addresses in advance and ensure a bounce functionality 11
3. Ensure that digital information reaches everyone in time and that information remains available 13
4. Measure login and click behavior in the MyEnvironment and activate participants to open notifications 14
5. Periodically discuss the reach of your communication as a board and continuously improve it 16 Conclusion 18

Challenges and Opportunities in the Digital Provision of Pension Information 3 ANALYSIS REPORT Summary 1 When we refer to participants, we mean: (former) participants, former partners and/or pension beneficiaries. Digital communication with participants by pension providers is becoming increasingly common.1 This has clear advantages, for example, the easier targeting of information and explanations to the person or target group. But there is also a risk: does legally mandated communication that pension providers distribute digitally reach all participants, or do some participants not receive that information (for example, due to an incorrect email address in the administration) or too late? The AFM has conducted research into the way pension providers ensure that the digital provision of legally mandated information actually reaches their participants. Although digital information provision is now the starting point for most pension providers, we see many differences, such as in the checks on the correctness of email addresses, the handling of emails that do not arrive (so-called 'bounces'), the way participants receive a notification, and the measuring of whether those notifications or the message itself are opened. Some pension providers use measurable objectives to improve their digital data provision, others do not. The role of the board also varies greatly. At some pension providers, the subject is on the agenda at every board meeting, at others rarely or never. Transition Communication The guidelines in this report also apply to the requirements regarding transition communication. We ask pension providers to study the guidelines carefully. The core of this report consists of five 'guidelines', which pension providers can use to improve their digital communication. We have provided them with tips, findings, and good (and bad) practices that we encountered during our research. The guidelines in brief:

Challenges and Opportunities in the Digital Provision of Pension Information 4 ANALYSIS REPORT The Five Guidelines

1. Serve every participant via their own preferred or standard channel. Most pension providers (56%) choose to provide information via the MyEnvironment with personal notification as the default (if the participant makes no choice themselves). Note: if the participant has chosen a specific way of provision, the pension provider must follow this.
2. Check email addresses in advance and ensure a bounce functionality. Most pension providers (94%) check afterwards whether email addresses are correct, usually when an email is 'bounced'. Two-thirds of pension providers also perform checks prior to the sending of legally mandated communication. A preliminary check on the spelling of the email address occurs most frequently. The check on business email addresses for dormant and retired participants takes place to a limited extent (19%).
3. Ensure that digital information reaches everyone in time and that information remains available. Some pension providers do not take into account any delay in the digital provision of information, for example due to bounces. As a result, mandatory information may reach the participant too late. In addition, it is important to inform participants during a value transfer or liquidation that important digital information (for example, in their MyEnvironment) will soon no longer be accessible to them.
4. Measure login and click behavior in the MyEnvironment and activate participants to open notifications. Only 28% of the pension providers surveyed measure the click and login behavior of participants and subsequently follow up on this, for example by sending a reminder. This type of activation is crucial to encourage participants to open and read messages.
5. Periodically discuss the reach of your communication as a board and continuously improve it. As a pension provider, it is important to have a policy, procedures, and measurable objectives for digital information provision. Report on this to the board. Not all pension providers do this. For example, one-third of pension providers have not drawn up written policy for digital information provision.

Challenges and Opportunities in the Digital Provision of Pension Information 5 ANALYSIS REPORT Research Design and Legal Framework 2 It is estimated that 2.5 to four million Dutch people experience problems in daily digital life. This group is very diverse and does not consist solely of older people. https://www.afm.nl/~/profmedia/files/publicaties/2023/drempels-bij-het-online-regelen-van-geldzaken.pdf 3 In findings that relate exclusively to digitally sent information (for example, measuring click behavior and sent emails), these pension providers were excluded from the statistics. Although there are pension providers who distribute pension information mainly via post to their participants, there is an undeniable trend to distribute this information digitally. There are good reasons for this. Digital communication enables pension providers to better tailor information to their population, for example by using graphical capabilities, hyperlinks, and layering. In addition, digital information provision is often faster, more climate-friendly, and cheaper. Participants also increasingly prefer this, as research by several pension providers shows: they can more easily find and search for important information about their pension in this way. Moreover, digital data provision offers pension providers the opportunity to measure various things: do participants open the notification? Do they actually log in to the MyEnvironment to read the information? And how much time do they spend reading the information and where do they drop off? We consider the transition from paper to digital a good development, provided that two important legal conditions are met. First, participants who wish to do so must retain the option to receive legally mandated information (also) on paper. Not all participants are sufficiently digitally skilled.2 It is important that they can indicate in a low-threshold and appropriate manner that they want to receive the information on paper. At least as important is that digital information arrives with all participants who have (implicitly or explicitly) chosen for this method of provision. This report focuses on this core issue: we provide pension providers with five guidelines that can help them improve the reach of digital communication. We advise all pension providers to read these guidelines carefully and optimize their own digital communication based on them. Reading Guide In certain situations, the law requires that pension providers - in addition to pension funds - also insurers and occupational pension providers (ppis) - must provide information. This applies, among other things, to the Uniform Pension Overview (UPO). This report concerns information that pension providers are legally required to provide to their participants. Thus, not information that they provide or make available of their own accord. To promote the readability of this report, we usually omit the addition 'legally mandated provision'. Know that we mean that in all cases - unless we explicitly state otherwise. For the same reason, we mean 'board or management' when we speak of the board. Not all guidelines are linked to a legal obligation. If there is a legal obligation, we mention the legal article or speak of must/shall or that there is an obligation. Research Design Over the past few months, we have conducted exploratory research into the way pension providers distribute legally mandated information to participants. And how they concretely ensure that this information reaches every participant in time. For this purpose, in November 2024, we sent a questionnaire to 36 pension providers (pension funds, insurers, and occupational pension providers (ppis)) regarding their digital information provision. Some pension providers have multiple schemes with a different communication approach, resulting in a total of 39 communication practices investigated. Six pension providers communicate exclusively in writing.3

Challenges and Opportunities in the Digital Provision of Pension Information 6 ANALYSIS REPORT In our exploratory research, we also tested the communication practice of pension providers against the requirements in the law regarding digital communication. Based on this, we sent a supervisory letter to a small number of pension providers for violating a legal article: due to not following the participant's preference in providing mandatory information and due to the lack of a bounce functionality, causing communication not to be provided (in time). Legal Framework Pension providers must make certain information available to participants on the basis of the Pension Act (Pw) (usually on the website) or provide it (digitally or in writing).4 When providing information, there is a duty to deliver. The pension provider must bring the information within the personal environment of a participant.5 Merely including information on a website is therefore not providing information. The Method of Provision The law allows information to be provided in various ways, namely electronically, in writing, or via a MyEnvironment combined with personal attention (Article 49, first paragraph, Pw). Written provision refers to the provision of information by post. Electronic provision can be done by sending the information in an email, but may also be done via the external message box of MijnOverheid.nl (Article 9d Decision on the Implementation of the Pension Act and Mandatory Occupational Pension Scheme Act (BuPw)). Provision via the website or MyEnvironment with personal attention usually occurs by sending a notification to the participant. Via that notification, the participant logs in to consult the information (in pdf) in their portal. The personal attention by means of a notification to the participant can be electronic, if the participant's email address is known, or in writing (Article 49, second paragraph, Pw). 4 When we refer to the Pension Act, the corresponding articles from the Occupational Pension Scheme Act (Wvb) apply to occupational pension funds. 5 Parliamentary Papers 2013-2014, 34 008, no. 3, p. 6. 6 By digitally provided information, we mean electronic provision and provision via the website combined with personal attention. If the participant has not determined in what manner they wish to receive information, the pension provider determines the method of provision on the basis of Article 49, second paragraph, Pw. According to Article 49, third paragraph, Pw, a pension provider may change the manner in which it provides information to a participant at most once per year. When providing via a website (such as the MyEnvironment), the pension provider personally alerts the participant. In doing so, they must point out the possibility to choose another method of information provision (Article 49, second paragraph, Pw). Furthermore, there is an obligation for the pension provider to state on the website that information can also be provided electronically or in writing. Via the website, the participant must be able to indicate or adjust their preference (on the basis of Article 49, second paragraph, Pw).6 The pension provider always provides the participant with a paper copy of digital information if requested (Article 49, fifth paragraph, Pw). In the case of layered information, they receive at least the first two layers on paper by post. The third layer can optionally be placed on the website, with the participant receiving a clear link to it. Furthermore, in the case of layered information, the pension provider must provide all mandatory information in the same manner. Thus, for example, it is not possible to provide the first two layers by post and the third layer (only) on the website if the third layer contains mandatory information. Alternative Method of Provision in Case of Incorrect Address When providing information electronically or via a website (with personal attention), it is important that the pension provider checks whether the email addresses of participants used are correct. From the legislative history, it appears that pension providers are responsible if there is evidently an incorrect email address. This is the case if the pension provider receives an email after sending stating that the email address is not correct. There is also an evidently incorrect email address in the case of a clear typo in the provided email address. 7 If the address known to the pension provider for the electronic provision of information turns out to be incorrect, the pension provider offers the participant the possibility to provide the correct address for the electronic provision of information (Article 50, fourth paragraph, Pw). It is important here that the pension provider monitors the timeliness of communication. Information must indeed be provided (or made available) in time (Article 48, first paragraph, Pw). Availability of Digitally Provided Information It is important that communication provided via a website remains accessible to the participant. If the pension provider provides information to the participant electronically or via a website (with personal attention), they are obligated to retain the electronically or website-provided information until one year after the death of the pension beneficiary or until one year after the cessation of the benefit to the survivors. The participant or former participant may request the electronically or website-provided information at most once per year (Article 49, fourth paragraph, Pw). 7 Parliamentary Papers II 2014–2015, 34 008, no. 6, p. 10.

Challenges and Opportunities in the Digital Provision of Pension Information 8 ANALYSIS REPORT Five Guidelines 8 Article 49, third paragraph, Pw Below we have elaborated on the five guidelines with which pension providers can increase the reach of their digital communication. After each guideline, there are always some findings from our research and good and bad examples that we encountered.

1. Serve every participant via their own preferred or standard channel An increasing number of participants prefer to receive pension information digitally. But there are (and will remain) participants who prefer paper. It is mandatory to follow the preference of participants in the provision of legally mandated information. Send participants with a preference for paper all legally mandated information by post with the full content (and not part digitally). This does not mean that you cannot use layered information, for example by means of attachments. It is also strongly recommended to also add the information provided on paper to the participant's MyEnvironment, for example in case they later develop a preference for digital or lose their documentation. Default for Participants Who Make No Choice Most pension providers use a standard method (default) of communicating (when participants make no choice). Often this is communication via the MyEnvironment with an email alert (sometimes by post). When choosing a standard method, carefully consider whether it fits the participants. Use participant research and choose a different communication method for specific participant groups where necessary. If you do not yet offer digital communication, also ask yourself whether you want to do so in the future to enable the participant to indicate their preference for digital. One-Time Deviation from Standard Method Make it clear to participants that they can deviate from the standard method if they wish. Put this possibility clearly on the website anyway. If digital is the standard communication method, also make it clear in another way (post, personal contact) that a participant can choose paper, otherwise they might miss that. In that case, also give participants the possibility to indicate their choice other than digitally. Even if the participant receives information via their preferred channel or the standard method determined by the pension provider, sometimes pension providers provide certain information (such as the UPO) standardly via paper (sometimes only to certain participant groups). Important to note here: if a participant has made a choice for a certain form of provision, all legally mandated information must be in that manner. Only the participant may then (at most once per year) switch. If a participant has made no choice, the standard method determined by the pension provider is leading. This may switch from method of provision at most once per year.8 You may, however, simultaneously use an extra channel to provide information. Note: providing only the UPO on paper to a participant (if the pension provider has chosen the standard method to provide information digitally, and the participant has thus not made a different choice) quickly leads to two switches per year. For this reason, it is wise to also provide the paper information digitally. A uniform method of providing information is also practical for file formation.

Challenges and Opportunities in the Digital Provision of Pension Information 9 ANALYSIS REPORT MijnOverheid As mentioned: many pension providers place pension information on the MyEnvironment and alert participants to it via a notification. Participants receive that notification via email, post, and sometimes via MijnOverheid. Realize that the latter channel can impose an extra step on participants: participants receive a message from MijnOverheid that information is ready for them. After logging in, they see the notification for the pension information, which they can then view via the MyEnvironment of their pension provider. Investigate whether this hinders participants from actually reading the message. Tracing Email Addresses If electronic (for example via the MyEnvironment with personal attention) is your standard method of provision, trace email addresses as much as possible. This can be done by organizing campaigns. This minimizes the number of participants who receive a notification by post due to the lack of a valid email address. A post notification can be an extra barrier to opening and reading an electronic message. Pay extra attention to tracing email addresses of hard-to-reach groups, including former partners and survivors. Findings Default Method of Communication Most pension providers (56%) choose digital communication as the default (if the participant makes no choice themselves). Just over a quarter of pension providers offer the possibility to receive communication digitally, but choose post as the default. Six parties in our research communicate exclusively by post. Part of this is working on the development of digital communication in the future. Under 'Other' fall provision methods such as the use of MijnOverheid. Figure 1: The default communication method of the 39 investigated schemes. Distinguishing Default Based on Participant Groups Our research shows that 79% of pension providers use one standard communication method for the entire population. 21% states that they distinguish between participant groups. Here we see, for example, that participants from a certain age receive communication standardly by post, because research by the pension provider showed that their older participants are less digitally skilled.

Challenges and Opportunities in the Digital Provision of Pension Information 10 ANALYSIS REPORT Exceptions to Using the Standard Method The law states that there may be a switch at most once per year in the manner in which information is provided. This may apply to pension providers who, of their own accord, make exceptions to the use of the standard method of provision for certain mandatory communication outputs. Most pension providers (77%) do not know exceptions to the standard method of communication for legally mandated communication; nine pension providers do. Five of these nine pension providers state that they use an alternative provision method simultaneously with the standard method, for example because a communication moment requires extra attention. The remaining four pension providers state that they deviate from the standard method for legal communication. This may mean that these pension providers switch from standard communication twice per year, which is not allowed. Figure 2: Are there exceptions to using the standard method in communication? Good Practice A pension provider switched to digital communication as the default. But participants who were 75+ at that time still received the information by post because this participant group appeared to be less digitally skilled. They are clearly pointed out the possibility to also receive the information digitally. Participants who turn 75 in the future will receive the information digitally by default unless they wish otherwise. Bad Practices • A pension provider chooses digital as the default with the ar