Recent pension reforms in Germany have contributed to a shift in responsibility for a sufficient retirement income from the state to the individual level and the resulting task of pension planning is a new challenge for many households. Roughly ten years after the introduction of the pension reforms the fraction of households without supplementary private of occupational old-age provision has decreased from over 70% to less than 40%. Annual statements that pension providers send to their clients informing them about the state of their pension savings are not standardized and in many cases unintelligible and full of small print.
FinTechs promise to reduce the information acquisition and processing cost for their clients. For this reason studying the effects of FinTech companies for lowering the information cost in the context of pension planning is particularly relevant and interesting.
We conduct a large field experiment in Germany to test this conjecture in the area of pension planning. In a nutshell, we offer participants in the study to get an APP-based overview of their future pension claims from different state, occupational and private pension contracts to facilitate their pension planning.
For the purpose of our field experiment, we cooperated with a German FinTech company that offers online insurance management to its clients. We developed a Pension Dashboard that allows participatns to get an overview of all their pesion claims from different sources. Participants fill out a questionnaire and are then encouraged to upload all their available pension documents – either by photographing hardcopies of their pension records, by uploading electronic versions or by sending us the hardcopies via postal mail. The back-office team enters the relevant data points from the user documents into the backend of the system which then computes aggregate pension claims for each user based on actuarial algorithms. When users view their personal dashboard they are prompted to take a second questionnaire. Additionally, participants were recontacted after about 6 months to fill in a third questionnaire.
We co-operate with Andreas Hackethal, Christine Laudenbach, and Johannes Kasinger (Goethe University Frankfurt) and with two German banks that help us acquire participants for the study and provide us with pseudonymized account and transaction data on each participating client. Data from all phases of the project have been collected during 2017 and subsequently analyzed.
Additionall funding is received from Netspar via the project "Preparing for Retirement: Tailoring, Literacy, and Effective Pension Communication", project members are Leo Lentz and Adriaan Kalwij (Utrecht University) and Rob Alessie (University of Groningen).