Past research has demonstrated that many individuals are not well equipped to make financial decisions and hence depend greatly on the flow and quality of financial information. The shift to defined contribution pension plans, which places more responsibility on savers, is definitely one of the most significant changes in pension systems across the world in the past decades. As life expectancy increases, people will rely on their savings for longer, governments around the world are implementing various reforms aimed at improving the quality of pension financial communication. Certain countries, such as Australia and Israel, are requiring a move to short-form pension reporting, and some, such as Germany, Austria, the Netherlands, the United Kingdom, Italy, Belgium, Israel, and Hungary, are requiring digital reporting instead of (or in some cases, in addition to) paper reporting. However, the consequences of the move from paper to digital remain unclear.
In a series of incentivized experiments and using a regression-based analysis, we show that the ability to locate information in financial reports is sensitive to the length of the report as well as to the communication form. Interestingly, we find that with paper reporting, participants are able to find information and answer follow-up questions better when provided with short reports, whereas in a digital framework, participants respond better when provided with longer financial reports. Our investigation sheds new light on the consequences of moving to digital reporting and underscores the need for further research on financial communication in the era of electronic disclosures.