What’s this project about?
We will transfer crucial knowledge about pension finance to the general public and to students in higher education programs related to pension finance, such as finance and economics.
Pension-finance knowledge can be viewed as a subfield of financial literacy. Knowledge about financial matters in general shows considerable room for improvement according to many recent studies. Regarding the knowledge in the area of pension finance in particular, the situation is complicated further by the fact that a solid understanding of the topic requires some understanding of insurance basics, demographic trends, and institutional specifics on top of financial matters like discounting and annuities. Since the entire working population is affected by pension systems, and increasing private pension savings can only work through more workers/contributors “opting into” additional (voluntary) third-pillar schemes, improving the understanding of pension systems and pension finance in the general population is important.
Also, in higher education programs there is ample room for improvement in this regard: Aside from programs where pension finance is at the core (e.g., insurance mathematics), the vast majority of students even in closely related programs like finance, economics, or business and management, never make any contact with the field. This implies a need for including pension finance knowledge also in programs at this level. Hence, the project has two target groups:
- European citizens, who want to understand both current policy issues related to pension finance and to gain the knowledge required to make informed decisions about their own pension planning.
- Students in higher education programs in fields related to pension finance, such as finance and economics.
Also, a transnational focus is essential because pension systems differ across countries. Having project partners from several European countries with different pension systems brings first-hand experience with these types of systems into the project.
What’s our contribution?
We will set up high-quality online courses teaching as many people as possible how to save for old age and set up solid individual pension plans.
Recent years have seen an increase in popularity of online courses and corresponding platforms like Coursera and Udacity. Such online courses have been used successfully to reach both target groups that are addressed by this project (the general public and students in higher education). A major advantage of such courses is that a very large number of people can be reached at comparatively low costs. Surprisingly (given the importance of the topic), a thorough search conducted on a number of these platforms revealed that as of now, neither online courses on pension finance/pension systems nor courses on individual pension planning are available. This holds not only for our focus on European pension systems, but for pension finance in general. Since this topic is relevant for everybody, an educational format like an online course, which has the potential to reach a large number of people, seems most appropriate to us. This format ensures the broadest possible dissemination and access, and it allows to serve both target groups through a modularized approach: Modules in the two courses described below as the first two intended intellectual outputs from this project range from general information on pension systems, which are easily accessible for everyone, to more advanced topics in the course targeted at higher-education students that require a certain level of (high-school) mathematics and statistics. Future users of these online courses will be able to learn about the covered topics at their own pace, whenever and wherever they prefer.
The third intended intellectual output of this project is a pension planning software, which will allow users to experience “hands on” the interplay between different pillars and instruments, as well as the effects of decisions to be made by people during their working lives. Aspects of pension planning covered in the online courses will be implemented within this software, which will allow users to derive optimal decisions regarding their own retirement planning for various different goals, also to be chosen by the users. Hence, the innovative aspects of the project can be summarized as follows: As of now, neither online courses on European pension systems, pension finance or personal pension planning are available, nor is there a tool publicly available that allows users to ex-ante assess the impact of various decisions to be made in retirement planning. Both are intended intellectual outputs of this project.
What do we expect to accomplish?
By providing easy access to knowledge about pension finance, we hope to increase financial literacy among the general public, thereby alleviating old age poverty.
Aside from the intellectual outputs, which are the main results of the project, increased awareness of pension finance and its importance will be reached through media presence and information about the project provided to universities throughout Europe. Increased awareness and better understanding of pension systems should contribute to the EU’s agenda of improving the adequacy and sustainability of pension systems in Europe. After taking the online courses, members from both target groups will be in a better position to make informed decisions regarding their own personal retirement planning. As a result of information on the project provided to higher education institutions, we expect that more universities and related institutions will consider the addition of pension finance modules to their curricula for related programs in subject areas like finance and economics. A major incentive to this end is the free availability of the online courses together with their modular structure, which will allow other institutions to select from a larger set of learning goals to fit the course into their curricula (according the their students’ background, related modules in their programs, and the intended size of a new pension finance module).