breakout: good practises in encouraging retirement planning
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BREAKOUT SESSION Good practices in encouraging retirement planning across the population
20 April 2016
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Good practices in encouraging retirement planning across the population
Moderator
Olaf Simonse
Head of Money Wise Platform, The Netherlands
Will Sandbrook
Executive Director of Strategy at NEST,
United Kingdom
Carlos Ramírez Fuentes
Chairman of the National Commission for
the Pensions System in Mexico
Miles Larbey
Senior Executive Leader, Financial Literacy,
at the Australian Securities and Investments Commission (ASIC)
Anne Seiersen
Executive Director Danish
Insurance Association
Femke Kruiderink
Supervision Officer at Netherlands
Authority of Financial Markets
Résalieke Vlieger
Communications Manager at Stichting Pensioenregister, The
Netherlands
Panelists
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Which square is darker, A or B?
A
B
Equal
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Hurdles en route to a sound retirement
Good practices in encouraging retirement planning across the population6 |
Snapshot of Australian retirement system• Government pension plus retirement savings plus other savings• Compulsory retirement saving system for employees introduced 1992,
concessional tax treatment• $2.046 trillion in superannuation• 265 superannuation funds• 568,943 self-managed superannuation funds• Average super balance age 60-64– Men: $292,510– Women: $138,154
Good practices in encouraging retirement planning across the population7 |
Recent reforms and current issues• Superannuation Guarantee increasing from 9% to 12% by 2025/26,
currently 9.5%• Superannuation choice - first introduced 2005• Strong Super reforms:– MySuper - default option– Product Dashboards for MySuper accounts– Portfolio holding disclosure– Registration of SMSF auditors
• Financial System Inquiry• Retirement income streams• Objectives of superannuation
Good practices in encouraging retirement planning across the population8 |
High-level introduction UK system• Pre-2000s – strong ‘pillar 2’ system with predominantly defined benefit (DB)
provision, but in decline:
– defined benefit (DB) – defined contribution (DC) shift– declining participation– falling contribution levels
• 2006 reforms - implemented from 2012
Auto enrolment • Employers must auto enrol
eligible workers• Set up or choose a ‘qualifying
workplace pension scheme’
NEST• One ‘qualifying scheme’ (DC)• Legal obligation to accept any
employer and their workers
9 | Behavioural Economics research https://www.youtube.com/watch?v=32_IL_D8LEA
Mexican context …
122 millioninhabitants
54.4 million accounts
55% of the population without social security
14.2% of GDP
20 million active workers
5.88% annual return
Expected replacement rate: 30%
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What does the audience think?
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For adequate pensions, product and system design are more important than education
Agree (products > education)
Disagree (education > products)
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What does the audience think?
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Having more choices will ensure that people more interested in their pension
Agree
Disagree
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What does the audience think?
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People are not rational when it comes to pensions, so education does not work
Agree
Disagree
13 | Behavioural Economics research https://www.youtube.com/watch?v=32_IL_D8LEA
From barriers to solutions…
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1,629
Rural
1,872
Urban
873
Urban
232
Urban
Automatic savings on line
More than 4,600 new points for voluntary savings
Make it easy…Convenience stores
15 | Strong call to action https://www.youtube.com/watch?v=32_IL_D8LEA
Make it simple…
Key features of the campaign:• Simple message• Easy goal (€ 1)• Catchy song• Popular group• It´s easy to
save: 4,600 convenience stores andwebpage
Consumers intention to saveCONSAR Survey
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Consumer behaviour
Step 1Awareness of a need
Engage with the system
Step 2Identify the functional
requirements Recognise and
define the specific need
Step 3Choose an appropriate
type of product-/solutio
nMatch the need
to a type of product/-solution
Step 4Evaluate specific
products/solutionsSelect appropriate product/solution
Step 5Post-
commitment evaluationContinual
assessment of decision
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Mijnpensioenoverzicht.nlThe Dutch pension tracking service
The Dutch Pension Tracking Service: Mijnpensioenoverzicht.nl
from overview - to insight - to action
The Dutch Pension Tracking Service: Mijnpensioenoverzicht.nl22 |
Using the ‘mental model’ for design
2. Information presented in layers
3. Using icons obligated throughout the sector
1. Personal timeline with ages and net amounts per month
The Dutch Pension Tracking Service: Mijnpensioenoverzicht.nl23 |
STARTERS
20-30 years old
Just have a look – it’s easy
BUILDERS
30-50 years old
Take care of your financials now – for later
ENJOYERS
50-60 years old
Check now if you want to know about your later income.
• Radio • Advertising on demand• Outdoor• Facebook
Weekly amounts of visitors
Visits to pension providers
• Checking your later income is easy• Its easier than a lot of your daily
habits• Surprising, recognisable and
personal
Our national campaign
The Dutch Pension Tracking Service: Mijnpensioenoverzicht.nl24 |
2011 2012 2013 2014 20150
500000
1000000
1500000
2000000
2500000
3000000
3500000
4000000
4500000
TotaalCumulatief
More new unique visitors
More young peopleNext steps
Focus on users
Women as a risk group
40% less
pension70% not
interestedKey to succes:
Communication and co-operation
Good practices in encouraging retirement planning across the population25 |
Example of interactive tools Impartial and trusted financial guidance
Good practices in encouraging retirement planning across the population26 |
Example of targeted resources
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