Conference Contribution Details
Mandatory Fields
Maloney, M. and McCarthy, A.
European Network for Research on Supplementary Pensions
Pension Communication: Case study evidence analysed using a bounded rationality framework.
Poznan University of Technology, Poland
Oral Presentation
Optional Fields
22-SEP-17
Simon (2008) stated that, “The term ‘bounded rationality’ is used to designate rational choice that takes into account the cognitive limitations of the decision-maker—limitations of both knowledge and computational capacity” (p. 893). Bounded rationality provides the theory and concepts that underpin liberal paternalism with “…the goal of influencing the choices of affected parties in a way that will make those parties better off” (Thaler and Sunstein, 2003, p. 175). This research investigates the impact of organisational pension communication policies for a DC (defined contribution) pension plan using a bounded rationality framework developed by Maloney and McCarthy (2017) from the work of Simon (1983) and Kahneman and Tversky (Kahneman, 2011, 2003). Maloney and McCarthy (2017) suggest that automatic enrolment, a structural pension policy, leads to unreflective decisions. However, communication policies that are frequent, targeted, segmented and individualised can potentially result in reasoned decisions. In this case study research, we analyse the organisational context in which pension policies are developed based on interviews with a trustee, HR representative, pension provider representative and independent financial advisor. We examine pension communication policies for evidence of frequency, targeting, segmentation and individualisation. Further, using criterion developed from the Simplification Centre at Reading University (Waller 2011b), clear print guidelines (Russell-Minda et al, 2006; RNIB, no date) and readability formulae (Flesch, no date), we evaluate written pension communication to determine if it assists pension decision making or adds to its complexity. Finally, we evaluate the impact of pension communication policies on individual decision making from the perspective of organisational employees who joined and did not join the pension scheme, based on semi-structured interviews.
Publication Themes