Is Information Overrated? Evidence from the Pension Domain

42 Pages Posted: 10 Dec 2012

See all articles by Henriette Prast

Henriette Prast

Tilburg University

Federica Teppa

De Nederlandsche Bank

Anouk Smits

Tilburg University

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Date Written: December 10, 2012

Abstract

This paper presents empirical evidence from the Netherlands indicating that the current policy based on information is unlikely to help people make the pension choices required in a system in which employees are the ultimate bearers of asset market risk. This holds even if information is made easier to understand, disseminated by the relevant media, and provided made to measure. The paper offers a behavioral explanation of the findings and concludes that policy makers, financial supervisors, and the pension industry should adopt alternative instruments for helping employees make good choices. These strategies may be useful in the context of recent proposals for a structural change of the pension system, including the increase in the eligibility age for the first layer pension (AOW).

JEL Classification: D1, D84, I3, H3

Suggested Citation

Prast, Henriette and Teppa, Federica and Smits, Anouk, Is Information Overrated? Evidence from the Pension Domain (December 10, 2012). De Nederlandsche Bank Working Paper No. 360, Available at SSRN: https://ssrn.com/abstract=2187301 or http://dx.doi.org/10.2139/ssrn.2187301

Henriette Prast (Contact Author)

Tilburg University ( email )

P.O. Box 90153
Tilburg, DC Noord-Brabant 5000 LE
Netherlands

Federica Teppa

De Nederlandsche Bank ( email )

PO Box 98
1000 AB Amsterdam
Amsterdam, 1000 AB
Netherlands

Anouk Smits

Tilburg University ( email )

P.O. Box 90153
Tilburg, DC Noord-Brabant 5000 LE
Netherlands

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