Using an online experimental survey, we test how Fact Sheets presenting standardised information on retirement income products – Average Annual Income, an Income security Product Rating, Potential Income Shape, Access to Capital, and Death Benefits – influence product knowledge, perceptions and choices from a menu of annuity, phased withdrawal and hybrid products. Product choice is significantly influenced by annual income and income security, and the annuity and hybrid annuity products are most preferred in Fact Sheet versions where income security is most salient. We find no significant differences in knowledge of Fact Sheet information by version, with Access to Capital least understood in all versions.
AgnewJRAndersonLRGerlachJR, et al. (2008) Who chooses annuities? An experimental investigation of the role of gender, framing, and defaults. American Economic Review98: 418–422.
2.
AgnewJRSzykmanLRUtkusS, et al. (2012) Trust, plan knowledge and 401(k) savings behavior. Journal of Pension Economics & Finance11: 1–20.
3.
AndersonABakerFRobinsonDT (2017) Precautionary savings, retirement planning and misperceptions of financial literacy. Journal of Financial Economics126: 383–398.
4.
Australian Government Actuary (AGA) (2018) Retirement Income Risk Measure. Parkes, ACT, Australia: AGA.
BatemanHPiggottJ (2011) Too much risk to insure? The Australian (non-) market for annuities. In: MitchellOPiggottJTakayamaN (eds) Securing Lifelong Retirement Income: Global Annuity Markets and Policy. New York: Oxford University Press, pp. 81–105.
8.
BatemanHDobrescuLINewellBR, et al. (2016) As easy as pie: How retirement savers use prescribed investment disclosures. Journal of Economic Behavior & Organization 121: 60–76.
9.
BatemanHEckertCIskhakovF, et al. (2017) Default and naïve diversification heuristics in annuity choice. Australian Journal of Management42: 32–57.
10.
BatemanHEckertCIskhakovF, et al. (2018) Individual capability and effort in retirement benefit choice. Journal of Risk and Insurance85: 483–512.
11.
BenartziSPreviteroAThalerRH (2012) Annuitization puzzles. Journal of Economic Perspectives25: 143–164.
12.
BeshearsJChoiJLaibsonD, et al. (2011) How does simplified disclosure affect individuals’ mutual fund choices? In: WiseD (ed.) Explorations in the Economics of Aging. Chicago, IL: The University of Chicago Press, pp. 75–96.
13.
BeshearsJChoiJLaibsonD, et al. (2014) What makes annuitization more appealing?Journal of Public Economics116: 2–16.
14.
BirdRFosterFDRafteryAM, et al. (2018) Who starts a self-managed superannuation fund and why?Australian Journal of Management43: 373–403.
15.
BockwegCPondsESteenbeekOW, et al. (2018) Framing and the annuitization decision: Experimental evidence from a Dutch pension fund. Journal of Pension Economics & Finance17: 385–417.
16.
BoyerMBox-CouillardSMichaudP-C (2020) Demand for annuities: Price sensitivity, risk perceptions, and knowledge. Journal of Economic Behavior & Organization180: 883–902.
17.
BrandtWKDayGSDeutscherT (1975) Information disclosure and consumer credit knowledge: A longitudinal analysis. Journal of Consumer Affairs9: 15–32.
18.
BrownJRKapteynALuttmerEF, et al. (2017) Cognitive constraints on valuing annuities. Journal of the European Economic Association15: 429–462.
19.
BrownJRKapteynALuttmerEF, et al. (2021) Behavioral impediments to valuing annuities: Complexity and choice bracketing. Review of Economics and Statistics103: 533–546.
20.
BrownJRKlingJRMullainathanS, et al. (2008) Why don’t people insure late-life consumption? A framing explanation of the under-annuitization puzzle. American Economic Review98: 304–309.
21.
BrownJRKlingJRMullainathanS, et al. (2013) Framing lifetime income. Journal of Retirement1: 27–37.
DayGSBrandtWK (1974) Consumer research and the evaluation of information disclosure requirements: The case of truth in lending. Journal of Consumer Research1: 21–32.
26.
DeetlefsJBatemanHDobrescuLI, et al. (2019) Engagement with retirement savings: It is a matter of trust. Journal of Consumer Affairs53: 917–945.
DiaconSHasseldineJ (2007) Framing effects and risk perception: The effect of prior performance presentation format on investment fund choice. Journal of Economic Psychology28: 31–52.
29.
DohmenTFalkAHuffmanD, et al. (2011) Individual risk attitudes: Measurement, determinants, and behavioral consequences. Journal of the European Economic Association9: 522–550.
30.
European Insurance and Occupational Pensions Authority (EIOPA) (2018) Implementation of IORP II: Report on the pension benefit statement: Guidance and principles based on current practices. EIOPA-BoS-18/328, 13November. Frankfurt: EIOPA.
GalesicMGarcia-RetameroR (2011) Graph literacy: A cross-cultural comparison. Medical Decision Making31: 444–457.
33.
GoslingSDRentfrowPJSwannWB (2003) A very brief measure of the Big-Five personality domains. Journal of Research in Personality37: 504–528.
34.
HiscoxMHobmanEDaffeyM, et al. (2017) Supporting Retirees in Retirement Income Planning. Barton, ACT, Australia: Department of the Prime Minister and Cabinet, Commonwealth of Australia.
35.
HowlettEABurtonSBatesK, et al. (2009) Coming to a restaurant near you? Potential consumer responses to nutrition information disclosure on menus. Journal of Consumer Research36: 494–503.
36.
IkonenISotgiuFAydinliA, et al. (2020) Consumer effects of front-of-package nutrition labeling: An interdisciplinary meta-analysis. Journal of the Academy of Marketing Science48: 360–383.
37.
IskhakovFThorpSBatemanH (2015) Optimal annuity purchases for Australian retirees. Economic Record91: 139–154.
38.
JangerEJBlock-LiebS (2006) The myth of the rational borrower: Behaviorism, rationality, and the misguided reform of bankruptcy law. Texas Law Review84: 1481–1565.
39.
KohBSKMitchellOSFongJH (2021) Trust and retirement preparedness: Evidence from Singapore. Journal of the Economics of Ageing18: 100283.
40.
KozupJHowlettEPaganoM (2008) The effects of summary information on consumer perceptions of mutual fund characteristics. Journal of Consumer Affairs42: 37–59.
41.
LambregtsTRSchutFT (2020) Displaced, disliked and misunderstood: A systematic review of the reasons for low uptake of long-term care insurance and life annuities. Journal of the Economics of Ageing17: 100236.
42.
LipkusISamsaGRimerBK (2001) General performance on a numeracy scale among highly educated samples. Medical Decision Making21: 37–44.
43.
LoewensteinGO’DonoghueT (2006) ‘We can do this the easy way or the hard way’: Negative emotions, self-regulation, and the law. University of Chicago Law Review73: 183–206.
44.
LusardiAMitchellO (2011) Financial literacy around the world: An overview. Journal of Pension Economics & Finance10: 497–508.
45.
MarkardJHoltE (2003) Disclosure of electricity products – Lessons from consumer research as guidance for energy policy. Energy Policy31: 1459–1474.
46.
Navarro-MartinezDSalisburyLCLemonKN, et al. (2011) Minimum required payment and supplemental information disclosure effects on consumer debt repayment decisions. Journal of Marketing Research48: S60–S77.
47.
Office of the Superintendent of Financial Institutions (OSFI) (2016) Disclosure Requirements for Defined Contribution Pension Plans. Available at: https://www.osfi-bsif.gc.ca/Eng/Docs/disclosure.pdf (accessed 8 December 2021).
SalisburyLC (2014) Minimum payment warnings and information disclosure effects on consumer debt repayment decisions. Journal of Public Policy & Marketing33: 49–64.
ThorpSBatemanHDobrescuL, et al. (2020) Flicking the switch: Simplifying disclosure to improve retirement plan choices. Journal of Banking & Finance121: 105955.
55.
US Securities and Exchange Commission (SEC) (2018) Updated Disclosure Requirements and Summary Prospectus for Variable Annuity and Variable Life Insurance Contracts. Available at: https://www.sec.gov/rules/proposed/2018/33-10569.pdf (accessed 14 January 2020).
56.
VischerTDohmenTFalkA, et al. (2013) Validating an ultra-short survey measure of patience. Economics Letters120: 142–145.
57.
WaltherT (2015) Key investor documents and their consequences on investor behavior. Journal of Business Economics85: 129–156.
58.
WarrenG (2021) Design of comprehensive income products for retirement using utility functions. Australian Journal of Management47: 105–134.
59.
WhiteSMSussmanABBeckettD (2019) When shrouded prices seem transparent: A preference for costly complexity. In: BagchiRBlockLLeeL (eds) Advances in Consumer Research, vol. 47. Duluth, MN: Association for Consumer Research (ACR), pp. 185–189.
60.
WienerRLHoltjeMWinterRJ, et al. (2007) Consumer credit card use: The roles of creditor disclosure and anticipated emotion. Journal of Experimental Psychology: Applied13: 32–46.
Supplementary Material
Please find the following supplemental material available below.
For Open Access articles published under a Creative Commons License, all supplemental material carries the same license as the article it is associated with.
For non-Open Access articles published, all supplemental material carries a non-exclusive license, and permission requests for re-use of supplemental material or any part of supplemental material shall be sent directly to the copyright owner as specified in the copyright notice associated with the article.
