Information on pensions often leads to confusionThe goal of FindyourPension (FYP) is to support researchers in dealing with their pension provisions. This is a difficult subject for all citizens who are not engaged or even interested in old-age provision. Due to its complexity, pension information often is too long and filled with special terms and professional jargon. Although increasing transparency needs do have an overall positive effect on the availability of information, more detailed pension information may not automatically be helpful for the members. The ISSA Report on Pension Communication, published 2016, identified 3 main challenges regarding pension communication: the lack of interest in the topic for a large part of the population (especially the young people), the actual complexity of the topic, and the low level of financial awareness, knowledge, confidence, skills and responsibility of consumers. Pension information should therefore be short, simple and easy to understand.
Relating pension communication to different life situations is one solution to make the information feel relevant to customers. Therefore, the FYP team structured its Pension ABC according to different personal life events in your career: Starting your job, your pension benefits, nearing retirement. Aligned to those situations we collected the most frequently asked questions of mobile researchers in terms of pension provision. Nevertheless, some of our users let us know that the pension information is still very long and they would not have the time to read all explanations. Therefore, at the occasion of our current FYP-website relaunch, we will introduce a layered structure of the Pension ABC. In addition to the current format of the Pension ABC we will offer a so-called “Basic layer”, which will provide only key information about systems in order to make our Pension ABC more compact and easier to understand.
Layering and the use of IconsLayering is a proposed technique of information provision, where in the first or “basic layer”, the key questions are answered and in a further “advanced layer” legal or more detailed information is retrievable. The essential purpose of layering is to support people in gathering information by using a structured format and not overloading the customer. The information should be provided in a way that clearly shows to the person how they can “use” it.
In recent years, policy makers have also shifted towards the insight that a legal or complicated version of pension information provision is not sufficient and people need foremost “key information”. In the field of insurance-based investment products the Insurance Product Information Document (IPID) is an example of this policy.1 This standardised presentation document should provide “standardised information about non-life insurance products” in order to allow the customers to make an informed decision. The IPID is based on a European regulation and even requires that insurance institutions have to make use of Icons when they provide key-information.2
The use of icons appears as a standard in today’s communication. Admittedly, using catchy icons with short explanations may be more attractive and informative for people than lengthy texts in a technical or legal language. But icons should also allow for a rapid detection, classification and comparability by many users, regardless of their cultural or social background. For instance, when you are searching for a holiday apartment on the internet, you often see the main essentials of the apartment presented by icons. The same way, the FYP team want to give you a short overview of the main essentials of each pension scheme by using icons.
Each icon will present a core aspect or a determined criterion of a pension system and should be understandable by an international target group. Therefore we have drafted a set of FYP icons inspired by the European insurance context. As far as possible we will use the same set of icons for the same features/essentials of both kinds of pension schemes, statutory and occupational ones. Each scheme will be described by giving short info on the essentials with regard to the criterion (the so called key information) presented by a respective icon. For more detailed information users are invited to click the Pension ABC in the second, advanced layer also known as the current Pension ABC.
When learning about the different features of your respective pension scheme, please always consider which source or pillar the scheme belongs to (and see the respective icons). Do you still know the difference? Have a look to our explanatory video.
Stepwise introduction of the FYP Icons:In the following months we will introduce the FYP icons, every month 2 of them in our news section. This month we will start to explain the icons “Pension Accrual” and “Qualifying Period”, two relevant criterions to understand when and how you accrue pension entitlements in a certain system. Be it in statutory or occupational systems, these aspects are part of the key information we already present in cooperation with our partner organisations. Our next newsletter will provide more information about the new edition of FYP, new design and search options.
Icon for Pension Accrual
Icon for Qualifying Period
|The old- age pension amount you have earned in a specific scheme depends on the way entitlements are “credited”. In other words, your pension entitlements „grow“like a plant depending on certain factors which are part of the different schemes you are in. Pension accrual can e.g. result from how long you were insured, the contributions paid, the average salary you earned in your life and others. Under this icon you will find the determining key factors||Some, but not all pension systems require a so-called qualifying period. This means you need a certain minimum period in which you have been insured and/or have paid contributions before your entitlements are vested or even accrued.
1 Regulation (EU) 2017/1469 of 11 August 2017, laying down a standardised presentation format for the insurance product information document
2 Eiopa, Draft implementing Technical standards concerning a standardised presentation format for the insurance Product information document of the insurance distribution directive, EIOPA-17/056, 7 February 2017