Comprehension of pension communication: Effects of legal obligations, literacy and revisions

In a project on Financial Communication, research has been done in the domains of pensions, mortgages and debt collection. This paper presents the results of three studies, concentrating on the pension domain. In the first study we reflect upon mandated disclosure. We demonstrate that the legal context for pension communication is far more detailed than for the other domains. There is a specific law on pension communication with detailed instructions for different documents. Pension organizations consider these obligations as a hindrance for effective and tailored pension communication. In the second study we tested whether participants could locate and comprehend specific information in two versions (original and revision) of three pension documents. We also measured the level of financial literacy of the participants. We demonstrate that in one case study the revision of the document resulted in a reverse Matthew-effect: participants with lower levels of financial literacy performed better in finding information using the revised document compared to the original. This reverse effect is labelled as a Martinus-effect