The application of behavioral economics to reforming pension systems – evidence from Great Britain and New Zealand

This article aims to evaluate the application of some of the solutions developed on the basis of the theory of behavioural economics in the practice of reforming pension systems. The research results presented regarding the use of behavioural economics in the reform of occupational pension schemes in Great Britain (automatic enrollment with a possibility of opting out at a certain time). The success of the British reform has been determined by the default option where an employee automatically enrolled in the occupational pension scheme is to remain in the program and co-pay contributions together with their employer. Quitting the program required taking the initiative and violating the status quo. In addition, a broad educational campaign has been launched, demonstrating a long-term benefit for both employees and employers (appropriate mental "formatting"), and the choice of an opt-out option (withdrawal in the first month and the recovery of the first contribution) as riskier (the mechanism of psychological risk aversion). The analysis of the implementation of occupational pension schemes with automatic enrollment demonstrates that the introduction of a similar solution in Poland constitutes a real chance for the dissemination of occupational pension schemes and would provide impetus to the development of the third pillar of the pension system in the country. The results achieved in these countries (dissemination of occupational pension schemes and an increase in the level of additional pension savings) are encouraging. On this basis, recommendations have been made on the possibility of applying similar solutions in Poland. The author also points to some of the dangers associated with the use of behavioural economics in the reform of pension systems (inter alia, manipulation of behaviour and decisions of participants not always in line with their interests, misspelling).