Future German pensioners will face a pension gap in retirement age if they base their income exclusively on the statutory pension. Conventional private pension alternatives are not lucrative, but they are still the most widely used. Exchange-traded funds (ETFs) have features that make them particularly attractive for pension provision.
The aim of this dissertation is to discover which factors influence the acceptance formation process and thus the usage of ETFs. Therefore, a model is developed that is based conceptually on the widely known technology acceptance model (TAM) and theoretically on the results of a comprehensive literature analysis, which summarises already identified obstacles within old-age provision. This model is then tested using an online survey on future German pensioners aged between 19 and 59 years (n=615). The descriptive statistics are then calculated for the recorded data, and subsequently, the relationships within the variable model are analysed for significant dependencies.
The results show that the assumed external variables have an influence on the acceptance of ETFs. In particular, the variable of financial literacy as an indicator of a person’s general financial knowledge turns out to be of overriding importance within the acceptance formation process. Furthermore, the results show that the use of an ETF is well recognised, but that it is still too complex to obtain information or acquire an ETF, which ultimately hampers acceptance formation, and thus the use. Finally, two concepts are developed that would have a positive influence on acceptance in different ways; they focus on different variables and behavioural patterns that still act as obstacles, thereby increasing the overall use of ETFs in Germany.
Table of Contents
1 Introduction
2 Research question and objectives
3 Literature review
3.1 The German pension system
3.2 Exchange-traded funds
3.2.1 Suitability as a private pension alternative
3.2.2 Comparison to the commonly used pension alternatives
3.3 Current state of research
3.4 Theoretical principles of acceptance
3.4.1 Acceptance model for ETF savings plans
3.5 Summary of the literature review
4 Data and Methods
4.1 Research question and hypothesis
4.2 Research design
4.2.1 Questionnaire
4.2.2 Operationalisation of the variables
4.2.3 Data collection and sample frame
4.2.4 Data evaluation methods
5 Results
5.1 Reliability test and factor analysis
5.2 Descriptive statistics of the sample
5.3 Regression analysis of the extended TAM
5.4 Moderation and mediation analysis for the extended TAM
5.5 Influence of environmental factors on acceptance
5.6 Awareness and acceptance of ETF savings plans
5.7 Expectations related to the use of ETF savings plans
5.8 Summary of the results
6 Discussion
6.1 Original TAM variables: PU & PEOU
6.2 Added extended TAM variables: RI & FI
6.3 Impact of environmental factors
6.4 Theoretical implications
6.5 Summary, outlook, and limitations
7 Policy recommendations
7.1 Merger of financial knowledge and presented information
7.2 Germany fund as a mandatory pension scheme
8 Conclusion
Research Objectives and Focus
The primary objective of this dissertation is to identify the factors and reasons that prevent German citizens from using Exchange Traded Fund (ETF) savings plans for their old-age provision, despite their advantageous characteristics. The study aims to bridge the gap between traditional, often unprofitable, pension alternatives and the potential of modern ETF-based investment strategies by developing an integrated acceptance measurement model.
- Examination of the German pension system and the challenges of the "pension gap."
- Analysis of the technical and financial characteristics of ETFs in comparison to traditional retirement products.
- Investigation of psychological and behavioral factors (behavioral finance) influencing retirement planning decisions.
- Development and empirical validation of an extended Technology Acceptance Model (TAM) incorporating financial literacy and risk perception.
- Derivation of policy recommendations to enhance the usage of private pension provision measures.
Excerpt from the Book
3.1 The German pension system
As previously mentioned, a partial goal of this study is to theoretically prove the emergence of the pension gap in old age to first fundamentally grasp the problem with regard to the research question. For this reason, the functioning of the current pension system in the Federal Republic of Germany is examined and analysed. This is not intended to deal with every facet of the sometimes highly complicated and extensive overall system, but rather to focus on the essential components that are indispensable for deriving the problem. In addition, only selected private old-age provision products that can be compared with the investment form of the ETF savings plans in terms of structure and other criteria are analysed in more detail.
The company pension scheme is not considered further in the following section because the contributor ultimately has no influence on the final use of contributions. Since 2002, an employee has had the right to claim a company pension plan in the form of deferred compensation without the employer’s consent, but the employer has sole decision-making power over the use of contributions (Clemens & Förstemann, 2015). This would become an indefinable variable in the course of the later comparison of the various alternatives, and thus make objective consideration impossible.
The so-called three-layer model of old-age provision forms the basis of the current old-age provision system in the Federal Republic of Germany. The model is essentially based on the older three-pillar model of old-age provision, and thus assumes that the income of a retired person comes from three different sources (Mierzejewksi, 2015). Therefore, this is not necessarily a substitution for the models, but rather an extension, which is largely based on the tax law-oriented Retirement Income Act introduced in 2005 (Ilg, 2010).
Summary of Chapters
1 Introduction: Discusses the growing "pension gap" in Germany and identifies the motivation for exploring private alternatives like ETFs.
2 Research question and objectives: Defines the core investigative questions regarding consumer acceptance and awareness of ETF savings plans.
3 Literature review: Provides a comprehensive theoretical background on the German pension system, ETF characteristics, and behavioral finance theories.
4 Data and Methods: Details the empirical research design, including the extended Technology Acceptance Model (TAM) and the survey methodology.
5 Results: Presents the findings from the online survey, including factor analysis, hypothesis testing, and the impact of demographic factors.
6 Discussion: Interprets the empirical results, discussing how variables like financial literacy and risk perception affect acceptance.
7 Policy recommendations: Proposes concrete steps such as integrating financial education into schools and implementing a state-controlled mandatory fund scheme.
8 Conclusion: Summarizes the key findings and highlights the research's contribution to understanding financial decision-making.
Keywords
Exchange-traded funds, retirement planning, pension provision, behavioural finance, acceptance, technology acceptance model (TAM), pension gap, financial literacy, investment behavior, Germany, retirement, policy recommendations, market analysis, behavioral bias, capital accumulation.
Frequently Asked Questions
What is the core issue addressed in this dissertation?
The work focuses on the "pension gap" in Germany, where future retirees face declining income levels from statutory pensions, and investigates why more profitable ETF savings plans are not widely adopted as a private provision tool.
What are the central thematic fields?
The research combines economic theories of the German pension system, the financial mechanics of ETFs, and psychological theories from behavioral finance to explain investment behavior.
What is the primary goal of the dissertation?
The aim is to identify factors influencing the acceptance of ETF savings plans among potential German pensioners and to propose methods to increase their usage.
What scientific methodology is applied?
The research uses a quantitative approach, specifically an extended Technology Acceptance Model (TAM), tested through an online survey of 615 respondents, supported by regression and moderation/mediation analysis.
What is covered in the main section of the thesis?
The main part includes a critical review of existing literature, the development of a specific research framework, empirical data collection, and a thorough discussion of the results regarding how financial knowledge impacts investment decisions.
Which keywords best characterize this research?
Key terms include ETFs, retirement planning, behavioral finance, the Technology Acceptance Model (TAM), and financial literacy.
How does "Financial Literacy" affect the results?
Financial literacy (FI) is identified as a superordinate factor that influences how users perceive the benefits (usefulness) and ease of use of ETFs, effectively acting as a moderator that strengthens the decision to adopt these investment tools.
What are the main policy recommendations derived from the research?
The author suggests two primary paths: a long-term improvement in general financial education within the school system and a short-term approach involving a simplified, state-subsidized mandatory pension fund modeled after the Swedish system.
- Quote paper
- Norman Ubber (Author), 2021, Exchange Traded Fund Savings Plans as Old-Age Provision Tool in Germany, Munich, GRIN Verlag, https://www.grin.com/document/1132378
