The project aims to increase the knowledge about pension finance and pension planning. It addresses two target groups: (i) European citizens (the general public) and (ii) students in higher education. It does so by developing two online courses, each targeting one of these groups. In order to bring in first-hand experience with different pension systems as well as knowledge from both academia and practice, two universities (from Liechtenstein and Italy) and one company specializing in pension planning software collaborate in this project.The contents of the courses are tailored to the respective target groups and range from a general understanding of life-cycle investment via the institutional background (three-pillar classification with a focus on European pension systems) to various instruments available for this purpose. As an integral part of both online courses, a pension planning software will be developed. This software allows users of the online courses to assess the effects of various pension planning decisions with respect to different possible ojectives. After taking the course targeted at the general public, users should be aware of the importance of their personal pension planning, should have a good understanding of pension systems in Europe, should have gained insights regarding their own pension finance situation from the pension planning software integrated into the course, and should hence be in a better position to ask the right questions (and avoid common pitfalls) when seeking advice on their own financial planning. After taking the course targeted at students in higher education, these students should have a detailed understanding of core economic, financial and mathematical concepts behind pension finance and personal pension planning, which lays the foundation for a thorough understanding of the mechanics behind pension planning software like the one integrated into the course.Potential longer term benefits of increased knowledge on pension finance include a decreased risk of old age poverty, lowering the hurdles for workers' mobility in the European Union, and more informed participation in political decision processes surrounding pension systems.
Pensions in Europe are high on the agenda of both the European Union and its member states. Given the major challenges of changing demographics and persistent low interest rates, it comes as no surprise that legislators at various levels identified the future development of pension systems as key to a number of related areas, ranging from the prevention of old-age poverty to ensuring the stability of public finances and economic growth. Topics such as pension adequacy and sustainability of European pension systems are two of the most important issues that are addressed by a recent report to the European parliament. The changes in pension systems that are required to reach these goals need also be understood by European citizens. This project therefore aimed to increase the knowledge about pension finance and pension planning as well as overall financial literacy. As major output of this project ("Understanding Pensions in Europe") we therefore developed online courses for the education of the general public as well as students in higher education in the topics of pension finance and personal pension planning. More in detail, we developed two different courses, one, to provide European citizens with an introductory online course (in English and German targeting approximately 49% of the European population) on the topic of "Pension Finance and Personal Pension Planning". Therein we use a series of videos, texts and online software applications to help people understand basics of pension finance, such as interest rates and inflation, periodic saving and spending decisions for work and pension life, as well as more advanced topics, such as the impact of risk on pension payments. The second course (available only in English), targets students in tertiary education with a background in related fields, such as finance, economics, and business/management, deepening the understanding of the aforementioned topics, including the mathematical background, and additionally introduces topics such as mortality and the risk of longevity. All in all, we think, that taking our introductory online course European citizens will be aware of the importance of their personal pension planning, will have a good understanding of pension systems in Europe and will have gained insights regarding their personal financial situation regarding savings and pension and their dependence on variables such as risk, changing interest rates and inflation. They will therefore be in a better position to ask the right questions (and avoid common pitfalls) when seeking advice on their own financial planning. After taking the second course, students in higher education will have a detailed understanding of core economic, financial and mathematical concepts behind pension finance and personal pension planning, which lays the foundation for a thorough understanding of the mechanics behind pension planning. The three project partners are the University of Liechtenstein, the Free University of Bozen-Bolzano (Italy) and a software company from Denmark (Keylane A/S) and bring together expertise covering all important aspects for the topic of pension finance and pension systems across Europe. All involved parties have a significant track record in the field of life-cycle financial planning and related methods, and through this project the research partners merged their multi-year experience with online learning with the industry expertise of Keylane A/S, which they gathered through extensive development of pension planning software. The resulting online courses have been tested with a wide group of employees at the University of Liechtenstein, as well as within dedicated courses in the MSc in Finance program (e.g. "Pension Finance") at the University of Liechtenstein. We have also promoted the final online courses through our "Conference on Pension Finance and the Teaching of Pension Finance", where we invited renowned researchers from all over the world to present and discuss their own work as well as the results of our project. We continue to develop online courses with our partners in the follow-up project USAVE "Understanding Saving in Europe". All in all, we believe that our online courses allow every European citizen to improve his or her financial literacy, resulting in better saving and pension decisions - thereby reducing (the danger of) old-age poverty - and more informed participation in political decision processes surrounding pension systems, such as the inherent pressure on governments to subsidize pensions at the expense of future generations.