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

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  • Hendrik P. Dalen

    (Netherlands Interdisciplinary Demographic Institute (NIDI)
    Tilburg University)

  • Kène Henkens

    (Netherlands Interdisciplinary Demographic Institute (NIDI)
    University Medical Center Groningen (UMCG), University of Groningen
    University of Amsterdam)

Abstract

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.

Suggested Citation

  • Hendrik P. Dalen & Kène Henkens, 2018. "The Making and Breaking of Trust in Pension Providers: An Empirical Study of Pension Participants," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 43(3), pages 473-491, July.
    • Handle: RePEc:pal:gpprii:v:43:y:2018:i:3:d:10.1057_s41288-018-0079-2
    DOI: 10.1057/s41288-018-0079-2
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    Cited by:

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    2. Ralph Stevens & Jennifer Alonso Garcia & Hazel Bateman & Arthur van Soest & Johan Bonekamp, 2022. "Saving preferences after retirement," ULB Institutional Repository 2013/342267, ULB -- Universite Libre de Bruxelles.
    3. Christophe Courbage & Christina Nicolas, 2021. "Trust in insurance: The importance of experiences," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 88(2), pages 263-291, June.
    4. Westerhout, Ed, 2020. "Pension Reform in the Netherlands," Other publications TiSEM 083befc2-9d79-4181-9e10-2, Tilburg University, School of Economics and Management.
    5. Westerhout, Ed & Ponds, Eduard & Zwaneveld, P.J., 2021. "Completing Dutch Pension Reform," Other publications TiSEM 4ee13c87-dd61-481b-bcb7-c, Tilburg University, School of Economics and Management.
    6. Westerhout, Ed, 2020. "Pension Reform in the Netherlands," Discussion Paper 2020-012, Tilburg University, Center for Economic Research.
    7. Wu, JunBiao & Zhang, YuYvette & Lin, BenXi, 2021. "The Impact of Trust in Government on Rural Residents’ Participation in China's New Rural Pension Scheme," 2021 Conference, August 17-31, 2021, Virtual 315288, International Association of Agricultural Economists.

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