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Pension profile preferences: the influence of trust and expected expenses

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  • Carin van der Cruijsen
  • Nicole Jonker

Abstract

This paper studies the influence of people’s expectations about expenses during retirement and trust in pension funds on preferences for different pension arrangements. Although most workers prefer a flat-rate annuity, many workers want to deviate from it. The most popular option is a high/low, annuity-based profile, followed by a partial lump sum payment. Workers who expect declining expenses during retirement are more likely to opt for a high/low annuity-based pension and/or a lump sum payment at retirement. Furthermore, workers and pensioners who do not trust their pension fund are more likely to prefer a lump sum over annuity-based arrangements.

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  • Carin van der Cruijsen & Nicole Jonker, 2019. "Pension profile preferences: the influence of trust and expected expenses," Applied Economics, Taylor & Francis Journals, vol. 51(12), pages 1212-1231, March.
    • Handle: RePEc:taf:applec:v:51:y:2019:i:12:p:1212-1231
    DOI: 10.1080/00036846.2018.1527010
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    Cited by:

    1. Pallavi Dogra & Arun Kaushal & Rishi Raj Sharma, 2023. "Antecedents of the Youngster’s Awareness About Financial Literacy: A Structure Equation Modelling Approach," Vision, , vol. 27(1), pages 48-62, February.
    2. Hendrik P. Dalen & Kène Henkens, 2022. "Trust and Distrust in Pension Providers in Times of Decline and Reform: Analysis of Survey Data 2004–2021," De Economist, Springer, vol. 170(4), pages 401-433, November.
    3. Floor Goedkoop & Madi Mangan & Mauro Mastrogiacomo & Stefan Hochguertel, 2023. "Trust in the financial performance of pension funds, public perception, and its effect on participation in voluntary pension saving plans," Working Papers 783, DNB.
    4. Bonekamp, Johan & van Soest, Arthur, 2022. "Evidence of behavioural life-cycle features in spending patterns after retirement," The Journal of the Economics of Ageing, Elsevier, vol. 23(C).
    5. Ammari, Aymen & Allodi, Evita & Salerno, Dario & Stella, Gian Paolo, 2023. "An asymmetrical approach to understanding consumer characteristics in banking trust during the COVID-19 pandemic in Italy," Research in International Business and Finance, Elsevier, vol. 64(C).
    6. Rik Dillingh & Maria Zumbuehl, 2021. "Pension Payout Preferences," CPB Discussion Paper 431, CPB Netherlands Bureau for Economic Policy Analysis.

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