Who lacks pension knowledge, why and does it matter?

Recent pension reforms have shifted a larger responsibility towards savers. Individuals therefore needbetter knowledge of the rules and incentives embedded in the pension system to adequately save andprepare for retirement. In this paper, we use a novel Swedish survey matched with high-quality ad-ministrative data to show that many lack, and feel that they lack, such pension-specific knowledge. Wealso show that the most economically vulnerable groups know the least. Linking pension knowledgeto behavior, we find that knowing less is associated with lower preparedness for retirement, even aftercontrolling for financial literacy and subjective knowledge. Moreover, a large majority state the com-plexity of the pension system, or that they have planned to learn more about pensions but that it justhasn’t happened, as reasons for why they do not have sufficient knowledge. That the complexity of thepension system and individuals’ proclivity to procrastinate are plausible causal factors for low pensionknowledge is supported by analyses showing that individuals with low math skills and procrastinationtendencies have lower pension knowledge.