Consumer Response to New Retirement Income Products: A Test Alternative Methods for Presenting Key Information

Last registered on December 20, 2017

Pre-Trial

Trial Information

General Information

Title
Consumer Response to New Retirement Income Products: A Test Alternative Methods for Presenting Key Information
RCT ID
AEARCTR-0001795
Initial registration date
December 02, 2016

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
December 02, 2016, 4:52 PM EST

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Last updated
December 20, 2017, 10:48 AM EST

Last updated is the most recent time when changes to the trial's registration were published.

Locations

Region

Primary Investigator

Affiliation
Harvard University

Other Primary Investigator(s)

Additional Trial Information

Status
Completed
Start date
2016-12-02
End date
2017-01-31
Secondary IDs
Abstract
The aim of the study is to provide evidence to help the Australian Government improve consumer understanding of retirement income products and maximize the alignment of consumer preferences with the choice of products. In particular, the study aims to test different methods for presenting information about the trade-offs consumers face between income, flexibility and risk protection when making choices between retirement income products, focusing on the comparison between new types of products aimed at managing longevity risks and the standard account-based pension (ABP) that most retirees receive. The effectiveness of various methods of presentation of information is measured by testing consumer comprehension and assessing the alignment of preferences with the self-reported likely choice of retirement income product.
External Link(s)

Registration Citation

Citation
Hiscox, Michael. 2017. "Consumer Response to New Retirement Income Products: A Test Alternative Methods for Presenting Key Information." AEA RCT Registry. December 20. https://doi.org/10.1257/rct.1795-3.0
Former Citation
Hiscox, Michael. 2017. "Consumer Response to New Retirement Income Products: A Test Alternative Methods for Presenting Key Information." AEA RCT Registry. December 20. https://www.socialscienceregistry.org/trials/1795/history/24284
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Experimental Details

Interventions

Intervention(s)
When individuals reach retirement, they have to make complex financial decisions about how to manage their retirement savings so that they get the most income for the rest of their lives. Currently it is common for retirees to choose to receive their superannuation as an account-based pension: an accessible managed fund from which they can draw annual income in amounts they choose. Most retirees appear to be drawing from these accounts at or near the regulated minimum rates, presumably in order to manage longevity risk.

The Australian Government has accepted the Financial System Inquiry recommendation to facilitate trustees pre-selecting Comprehensive Income Products for Retirement (CIPRs) for their members. This is aimed to help guide members at retirement and improve outcomes for retirees, including through increased private retirement incomes, increased consumer choice and better protection against longevity and other risks.

This study aims to provide insights about whether consumers can understand a hypothetical new type of retirement income plan (an example of a potential CIPR) and make choices that fit with their preferences, testing various methods for presenting the key information about the plan.

An online experimental survey will be used to present a hypothetical ‘offer’ of a potential new retirement income plan to participants. Eligible participants will be aged 45 and above and still in the superannuation accumulation phase with either active or inactive accounts, with a wide range of superannuation balances. The trial approximates a “framed field experiment” in which subjects are drawn from the population of interest and complete a familiar task (review the offer of a new financial product) in a naturally-occurring context, but understand that in this instance they are completing the task as part of a research study.

Individuals who agree to participate in the study will be randomly assigned to view different textual and/or graphical explanations of a retirement income plan with comparisons between this plan and a standard account-based pension. The different treatments are design to test how people respond to the presentation of the same information in text form versus graphical and numerical forms, whether the addition of star ratings improves understanding, and the impact of a salience prompt aimed at emphasizing one dimension of the choice (average income). Subjects will then be asked to indicate, hypothetically, how willing they would be to accept such a plan if it were offered to them by their superannuation fund. They will also be asked a set of questions to measure understanding of the alternative plans and the trade-offs involved in making a choice between them, as well as an open-ended question asking members to explain their choice. The survey should take no more than 15 minutes to complete.
Intervention (Hidden)
The Australian Government has accepted the Financial System Inquiry recommendation to facilitate trustees pre-selecting Comprehensive Income Products for Retirement (CIPRs) for their members. This is aimed to help guide members at retirement and improve outcomes for retirees, including through increased private retirement incomes, increased consumer choice and better protection against longevity and other risks. CIPRs will be new composite retirement income products offered by superannuation funds and other product providers.

As CIPRs are yet to be developed by the superannuation sector; there is no potential for a real-world field experiment. Thus, an online experimental survey will be used to present a hypothetical ‘offer’ of a potential new retirement income plan to participants. The preamble to the survey will explain that the Government is interested in learning what people think about this product prior to help inform development of a framework to facilitate their offering by superannuation funds and other product providers.

An online experimental survey will be used to present a hypothetical ‘offer’ of a potential new retirement income plan to participants. Eligible participants will be aged 45 and above and still in the superannuation accumulation phase with either active or inactive accounts, with a wide range of superannuation balances. The trial approximates a “framed field experiment” in which subjects are drawn from the population of interest and complete a familiar task (review the offer of a new financial product) in a naturally-occurring context, but understand that in this instance they are completing the task as part of a research study.

Individuals who agree to participate in the study will be randomly assigned to view different textual and/or graphical explanations of a retirement income plan with comparisons between this plan and a standard account-based pension. The different treatments are design to test how people respond to the presentation of the same information in text form versus graphical and numerical forms, whether the addition of star ratings improves understanding, and the impact of a salience prompt aimed at emphasizing one dimension of the choice (average income). Subjects will then be asked to indicate, hypothetically, how willing they would be to accept such a plan if it were offered to them by their superannuation fund. They will also be asked a set of questions to measure understanding of the alternative plans and the trade-offs involved in making a choice between them, as well as an open-ended question asking members to explain their choice. The survey should take no more than 15 minutes to complete.


Intervention Start Date
2016-12-02
Intervention End Date
2016-12-31

Primary Outcomes

Primary Outcomes (end points)
The survey will enable us to measure how different presentations of the trade-offs impact the alignment of preferences and consumer choices, to help inform the development of a framework for CIPRs
Primary Outcomes (explanation)
We will measure comprehension of the alternative plans and the trade-offs involved in making a choice between them (measured on a scale of 0-7 based on number of correct answers to comprehension questions). We will also measure how likely individuals say they would be to accept the new retirement income plan if it were to be offered to them by their superannuation fund (on a scale of 0-100%). Individuals will be asked to rank their preferences among various considerations when thinking about their retirement and we will also assess the alignment between these stated preferences and their likely choice of retirement income plan.

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
The study is aimed at helping to develop solutions that the Government could realistically deploy in its regulatory framework to optimize the disclosure standards and recommendations for Comprehensive Income Products for Retirement. The key objective is to identify the best way to present information about the core features of CIPRs, in the context of a comparison with the alternative (standard) option of an account-based pension with minimum drawdown rates. The interventions are designed to test different ways to presenting key features of products as simply and clearly as possible in order to achieve sound understanding and to promote a preference-consistent choice.

The study will be conducted in partnership with superannuation fund managers who will provide contact information for a sample of their members. An online experimental survey will be used to present a hypothetical ‘offer’ of a potential new retirement income plan to participants. The study approximates a "framed field experiment" with eligible participants drawn from current fund members aged 45 and above and still in the superannuation accumulation phase with either active or inactive accounts, with a wide range of superannuation balances.

Individuals who agree to participate in the study will be randomly assigned to view different textual and/or graphical explanations of a retirement income plan with comparisons between this plan and a standard account-based pension. The different treatments are design to test how people respond to the presentation of the same information in text form versus graphical and numerical forms, whether the addition of star ratings improves understanding, and the impact of a salience prompt aimed at emphasizing one dimension of the choice (average income). Subjects will then be asked to indicate, hypothetically, how willing they would be to accept such a plan if it were offered to them by their superannuation fund. They will also be asked a set of questions to measure understanding of the alternative plans and the trade-offs involved in making a choice between them, as well as an open-ended question asking members to explain their choice.
Experimental Design Details
The study is aimed at helping to develop solutions that the Government could realistically deploy in its regulatory framework to optimize the disclosure standards and recommendations for Comprehensive Income Products for Retirement. The key objective is to identify the best way to present information about the core features of CIPRs, in the context of a comparison with the alternative (standard) option of an account-based pension with minimum drawdown rates. The interventions are designed to test different ways to presenting key features of products as simply and clearly as possible in order to achieve sound understanding and to promote a preference-consistent choice.

The study will be conducted in partnership with superannuation fund managers who will provide contact information for a sample of their members. An online experimental survey will be used to present a hypothetical ‘offer’ of a potential new retirement income plan to participants. The study approximates a "framed field experiment" with eligible participants drawn from current fund members aged 45 and above and still in the superannuation accumulation phase with either active or inactive accounts, with a wide range of superannuation balances.

Individuals who agree to participate in the study will be randomly assigned to view different textual and/or graphical explanations of a retirement income plan with comparisons between this plan and a standard account-based pension. The different treatments are design to test how people respond to the presentation of the same information in text form versus graphical and numerical forms, whether the addition of star ratings improves understanding, and the impact of a salience prompt aimed at emphasizing one dimension of the choice (average income). Subjects will then be asked to indicate, hypothetically, how willing they would be to accept such a plan if it were offered to them by their superannuation fund. They will also be asked a set of questions to measure understanding of the alternative plans and the trade-offs involved in making a choice between them, as well as an open-ended question asking members to explain their choice.
Randomization Method
Randomization done by a computer algorithm embedded within the survey.
Randomization Unit
Individual
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
N/A
Sample size: planned number of observations
1,600
Sample size (or number of clusters) by treatment arms
200 individuals in control group, 200 individuals in each of 7 treatment groups
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
A total sample of approximately 1,600 will provide 80% statistical power to detect substantial (≥10%) impacts of the different treatments consumer’s understanding of the new superannuation product
IRB

Institutional Review Boards (IRBs)

IRB Name
BETA Ethics Committee
IRB Approval Date
2016-10-26
IRB Approval Number
N/A
Analysis Plan

Analysis Plan Documents

Analysis Plan CIPR Tables of Results for Primary Outcomes

MD5: f8121f1d3e55596b5cf1c1cee25f5669

SHA1: d11ab0daa600fbd5b42f72224466fc96ce9b56ac

Uploaded At: December 02, 2016

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
Yes
Intervention Completion Date
December 31, 2016, 12:00 +00:00
Data Collection Complete
Yes
Data Collection Completion Date
January 31, 2017, 12:00 +00:00
Final Sample Size: Number of Clusters (Unit of Randomization)
n/a
Was attrition correlated with treatment status?
No
Final Sample Size: Total Number of Observations
3,732
Final Sample Size (or Number of Clusters) by Treatment Arms
499 in control; alternative treatments (different information presentations) 440, 466, 482, 470, 471, 456. and 448
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
No
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials