For the purpose of jointly promoting improvements and amendments of the regulations that enable creating value in the pension industry, in conjunction with local associations, FIAP decided to prepare a survey that seeks to identify and share experiences in communications and advisory services provided by the pension fund managers, in order to improve the pension and financial culture of members, and thereby strengthen the relationship with them and contribute to the reduction of risk in the pension industry. The countries covered by the survey are: Bolivia, Chile, Colombia, Costa Rica, Spain, Mexico, Panama, Peru, Dominican Republic and Uruguay.

The background information and experiences reviewed during the preparation of this document, show different ways of contributing to improving the communications and advisory activities provided by the Pension Fund Managers for generating change in the savings behavior of workers, and convincing people of the importance of contributing to pension schemes.

The following proposals, among others, have been put forward:

1. The convenience of having people visualize their future in retirement in an entertaining and intuitive way, using vivid images. Existing technology, such as computerized simulations, can be used to advantage to portray the future more vividly for individuals, in an attempt to generate behavioral changes and a different attitude when visualizing possible effects on their standard of living and welfare in retirement, depending on whether or not they save.

2. Gradually progress from communications that emphasize accumulated balances and the returns of short and medium-term investments, to presenting the pension flows that workers can obtain at the end of the active phase, depending on their savings flows and other relevant variables. This way of showing the results of saving is more vivid than the accumulated balance, and focuses on the main objective of a pension system, namely the provision of pension flows.

3. The use of simple and appropriate language for the segment of people one is trying to reach, not including too many issues or messages that create confusion, and concentrating on the most important issues, such as the timely initiation of savings and the importance of regularly contributing throughout active life.

4. There must be rules and regulations governing communications, advertising and promotion by the pension fund managers for informing members of the essential aspects of the pension programs, in a clear, simple, sufficient, comparable and timely manner, respecting their rights and obligations and the variables and decisions that are most relevant for pension results. It calls one’s attention that there are no rules and regulations governing these activities in two of the countries surveyed: Bolivia and Spain. These issues are regulated in the rest of the countries, either in the law governing the individually funded pension systems, or through other laws or secondary legislation.

5. Do not generate over-expectations regarding the benefits that the savings programs can provide, and involve people in the construction of their pensions. The goals must be realistic, and it is important to clearly explain to members the main factors affecting expected savings results, the measures that can be taken to increase benefits and the consequences of not saving an appropriate amount in a timely manner.

6. The need to coordinate efforts among regulators, supervisors and fund managers for achieving synergies and strengthening the credibility and confidence of savers in the institutions. The attitude of the authorities, regulators and other agencies can have a significant bearing in these matters. Several of the countries surveyed are carrying out a variety of different activities together with the authorities, such as, for example, participation in round tables on pension education (Chile) and the establishment of agreements with public agencies for education in matters such as economics, finance and the promotion of pension savings (Mexico and Uruguay). These types of alliances are also entered into with universities and student unions (Mexico, Dominican Republic, Uruguay), business organizations (Mexico), groups/organizations that are responsible for education and financial inclusion (Peru), different kinds of foundations (Uruguay), and non-profit organizations that contribute to the education of young people (Uruguay). The testimonies of opinion leaders can also help to improve the credibility and reputation of the different institutions involved in the pension industry.

To review the results of the survey in detail, please download the document at the bottom of this page or visit the following link.