The important role of intention and financial literacy in pension plan members’ retirement savings behaviors during COVID-19

Purpose This paper employs a comprehensive theoretical model of behavior to investigate the role of financial literacy in retirement savings behaviors: voluntary savings and investment plan change during COVID-19. Survey data from members of a large pension fund is combined with fund administrative data to empirically test the model. Design/methodology/approach Following preliminary surveys of members we developed and administered a survey to a representative sample of members, in Thailand’s Government Pension Fund (GPF). We matched survey responses to administrative sample data of member behavior before survey administration and six months following. Findings We establish that social norms are the strongest positive predictor of intention to perform both behaviors, and in turn behavior intention and perceived control over behavior are significant in explaining actual behavior. In addition, objective financial literacy is a significant positive predictor of both behaviors, notably commencing the behavior as well as a negative predictor of stopping. Research limitations/implications Having collected data immediately prior to and in the early stages of COVID-19 allows an insight into behavior during a significant health, social and financial event. Future work can investigate the extent to which the event moderated results. Practical implications The results suggest that financial institutions (e.g. pension funds) wanting to increase member savings and promote the role of investment strategy review may usefully focus on developing member behavioral intentions and improve financial literacy. We also note heterogeneity in results, which highlights the challenge faced by large institutions such as Thailand’s GPF to efficiently cater to a diverse membership. Originality/value The combination of survey data and fund administrative data allows both members’ intention to perform retirement savings behaviors and their actual behavior to be investigated. The timing of data collection provides valuable evidence of individuals’ savings intention and behavior during the onset of COVID-19 in a developing, upper middle-income country.