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The Making and Breaking of Trust in Pension Providers: An Empirical Study of Pension Participants


Trust in pension institutions is pivotal in making pension decisions, like saving or enrolling in pension programs. But which traits of pension institutions matter in making or breaking trust in providers like pension funds, banks or insurance companies? This paper presents an empirical analysis of the underlying forces of trust in private pension providers in the Netherlands. Based on a large-scale survey among pension participants, we show that the perceived integrity, competence, stability and benevolence of pension providers matter in assessing their trustworthiness. First, pension funds are more trusted than banks or insurance companies, a difference that is primarily related to weights attached to perceived levels of integrity and stability. Second, higher educated participants have a significantly higher propensity to trust pension providers than lower educated. Third, transparency as perceived by participants plays virtually no role in establishing trust.

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  1. 1.

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    We have checked for possible multicollinearity in the explanatory factors by carrying out variance inflation factors (vif), and for all trust markers the vifs were 2 or lower, which is well below the limiting benchmark values often used in statistics (O’Brien, 2007), suggesting that multicollinearity is not a problem in carrying out the ordered logit analysis.

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    A similar conclusion about banks can be found in Jansen et al. (2015). Although they do not speak of fairness or honesty, the high remuneration packages in the banking sector are seen as a very negative element by consumers.

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    There are some similar approaches in financial services marketing, like the Financial Trust Index run by the Nottingham University Business School (see, e.g. Ennew and Sekhon, 2007), although they do not, as proposed by Gärling et al. (2009), include stability as a trust driver and they also do not focus on pension finance.


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This research was carried out with the support of a Netspar Grant concerning the project ‘Trust and individual choice in collective pension arrangements’ and a grant of the Netherlands Institute for Advanced Studies (NIAS) and the VICI Research Grant (Grant no. 453-14-001) of the Netherlands Organisation for Scientific Research (NWO). Comments by participants of Netspar workshops are gratefully acknowledged.

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Correspondence to Hendrik P. van Dalen.

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van Dalen, H.P., Henkens, K. The Making and Breaking of Trust in Pension Providers: An Empirical Study of Pension Participants. Geneva Pap Risk Insur Issues Pract 43, 473–491 (2018).

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  • trust
  • pension
  • stability
  • integrity
  • transparency