breakout: good practises in encouraging retirement planning

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


Which square is darker, A or B?

A

B

Equal


Which square is darker, A or B?


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


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


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%

https://www.youtube.com/watch?v=32_IL_D8LEA


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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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Having more choices will ensure that people more interested in their pension

Agree

Disagree

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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…



14 |

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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Make it clear and repetitive...

Voluntary contributions increased 33% (2014-2016)


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


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


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


Example of interactive tools Impartial and trusted financial guidance


Example of targeted resources


Opting out of NEST

breakout: good practises in encouraging retirement planning

Government & Nonprofit