The promise of the new pension system
'Research shows that moments of system change are when people are open to new ideas,' says Sander Appel, who works as a customer experience director at PwC for clients in the financial sector. 'Pensions are now in the spotlight, among participants, in the media, at kitchen tables. This is a momentum the pension sector rarely gets to really motivate people. Let's take advantage of it and join forces with the sector for a financially stronger retired Netherlands.'
The Pensions Future Act (Wtp) brings more choice and more transparency to the pension system. For example, the AFM recently announced that from 2027 onwards, it expects all costs to be displayed at an individual level by pension providers. Participants will also gain insight into their personal pension fund. 'But what if people do not make use of that information?' asks Don van der Steeg, pension adviser at PwC. 'Then the promise of the new system remains a paper reality. The key question is therefore not only how we inform people, but how we motivate participants to make choices that suit their situation.'
Passivity of pension participants
'The passivity of participants regarding the topic of pensions is something fundamentally human,' says Marinka van der Meer, who has over 25 years of experience in the financial sector as CEO, CCO and COO (among others at Volksbank, Argenta Nederland and Nationale-Nederlanden Bank): 'Behavioural economists call this "present bias": the tendency to postpone long-term decisions. In pensions, procrastination is reinforced by complexity and the abundance of choices: do you choose a lump sum or spread payments? Fixed or variable pension? High-low? What about the partner pension?'
In addition, the 'self-efficacy' of many participants is low: they have little confidence in their ability to make good choices, which further increases the barrier to taking action. Participants cannot always foresee the consequences of choices because basic knowledge about matters such as risk, inflation, time value and spread is lacking, while they have a significant influence on matters such as value transfer, the investment profile or the lump sum amount. Appel: 'It is up to the pension sector to also reach that large middle group which is not unwilling, but uncertain about their own financial knowledge.'
Lessons from the mortgage world
The interest-only mortgage provides an instructive parallel. Through her involvement in the mortgage sector, Van der Meer witnessed firsthand how millions of interest-only loans had been positioned as ideal for years. The need for eventual repayment seemed distant and not urgent. At her initiative, the sector focused on broad and clear communication, repeatedly highlighted to raise awareness. Only then did real progress occur. The AFM described the impressive conversion figures: 1.68 million customers were approached, 44 percent took action, and the number of customers at increased risk of residual debt fell by 63 percent.
Van der Meer: 'The essence of the success was not a single campaign or slogan. It was the combination of a recognisable core message for broad awareness, followed by tailored solutions for each household. The same human logic can also be applied in the pension sector: first collective awareness, then personal choice guidance.
Practical examples of activating pension participants
There are now examples that show on a small scale how people are prompted to take action regarding their pension. The Pension Fund for Health and Social Care tested short emails encouraging participants to check their pension. The message: it takes less time than making a cup of tea. The accompanying photo: care workers drinking tea together, immediately recognisable to the target audience. The result: where normally around five percent open an email, this time it was forty percent. Emails sent on the recipient's fortieth or fiftieth birthday were opened by more than half. The barrier disappeared when the message seamlessly aligned with the moment and the recipient's experience.
Another example is Shell Pension's CARE programme, developed in collaboration with, among others, Prikkl. CARE invited participants aged 54 and older to a personal conversation about their pension choices. The response rate was 22.3 percent, well over double the benchmark. After the conversation, eighty percent said they were considering or taking concrete steps. But the most striking results were financial. A sample of 36 conversations showed that participants, through more conscious choices, realised on average over €150,000 in improved pension outcomes. This was made possible simply by using the existing choice options for personal goals and needs: adjusting the payout profile, reconsidering the lump sum, and aligning the partner pension with the actual situation.
Potential pension improvements
What do these practical examples potentially mean? Barbara Baarsma, chief economist at PwC: 'Shell participants generally have higher pension assets than average. But even with more conservative assumptions, the potential impact remains substantial, as a simple calculation shows.'
In 2022, nearly 110,000 people retired in the Netherlands. If only ten percent of them make a choice through better guidance that results in an average benefit of 25,000 euros, this already amounts to 275 million euros in more suitable pension outcomes per year. Even in a very cautious scenario where only five percent of new retirees are reached and the average improvement does not exceed 20,000 euros, the total effect remains approximately 110 million euros per year. In an optimistic scenario, where fifteen percent of all new retirees are guided, with an average improvement of 30,000 euros per person, the impact rises to nearly half a billion Euro.
'Moreover, better fitting choices not only have positive financial consequences,' says Appel, 'but they also influence the way someone can organise their life: less uncertainty, more predictability, better alignment with one's own situation, and a lower chance of disappointment afterwards.' According to Appel, it is crucial to measure what works and what does not in order to achieve these positive outcomes: 'Continuously and preferably in real-time; this way you can see not only that outcomes improve, but also exactly where in the interventions the difference is made, so you can adjust purposefully.'
Behavioural Science Guidelines Summarised
The Pension Act and the Pensions Future Act (Wtp) require accurate, clear and balanced information and choice guidance for participants. The AFM implements this concretely, partly from a duty of care perspective: offering scenarios, issuing warnings where necessary, ensuring repetition and predictability, and providing services that are accessible both digitally and in person. To create real impact, behavioural science can offer the following guidelines to pension professionals responsible for participant communication, choice guidance and successfully managing the transition:
- Capitalise on the momentum by delivering a unified message as a sector. Especially now, as people are more receptive to pensions due to the system change, you help participants with a consistent, shared message, creating collective pension awareness and motivating participants to take action.
- Make pension choices concrete. Funds and insurers can align with the collective message through targeted, personalised communication. Use scenarios and examples to make abstract choices tangible and to overcome 'present bias'.
- Make pension choices personal. Support participants in exploring their options, offering appropriate guidance to make individual decisions understandable. Show that pensions are not just something you have, but something you can confidently plan for.
- Strengthen self-confidence and financial knowledge. Provide simple explanations and interactive tools, such as short explanatory videos, to increase self-efficacy and reduce uncertainty.
- Repeat communication and link it to relevant moments. By offering information as clear signals at relevant times, you encourage desired behaviour and break procrastination.
There is momentum now
Pensions are firmly in the spotlight: with participants, in the media, and in politics. Especially in the period immediately after implementation, a collective message can serve as a powerful trigger. It breaks the daily routine and places pensions explicitly on the agenda. When funds and insurers follow up with targeted, personalised communication and appropriate choice guidance, recognition and engagement are created. This increases the likelihood that participants actually take action and sets a positive dynamic in motion within the sector.
The next step is to go deeper: making individual choices understandable, providing support where needed, and showing that pensions are not just something one has, but something one can approach with confidence. By jointly utilising this momentum, the pension sector can contribute to better-suited pension outcomes for millions of Dutch people.
