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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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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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). https://doi.org/10.1057/s41288-018-0079-2