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The making and breaking of trust in pension providers : An empirical study of pension participants

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  • van Dalen, Harry

    (Tilburg University, School of Economics and Management)

  • Henkens, Kene

    (Tilburg University, School of Economics and Management)

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

  • van Dalen, Harry & Henkens, Kene, 2018. "The making and breaking of trust in pension providers : An empirical study of pension participants," Other publications TiSEM a23d8c7c-5857-48ee-a1ab-a, Tilburg University, School of Economics and Management.
  • Handle: RePEc:tiu:tiutis:a23d8c7c-5857-48ee-a1ab-a63def18d824
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    References listed on IDEAS

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    1. Niclas Berggren & Henrik Jordahl, 2006. "Free to Trust: Economic Freedom and Social Capital," Kyklos, Wiley Blackwell, vol. 59(2), pages 141-169, May.
    2. Annamaria Lusardi & Olivia S. Mitchell, 2014. "The Economic Importance of Financial Literacy: Theory and Evidence," Journal of Economic Literature, American Economic Association, vol. 52(1), pages 5-44, March.
    3. van Dalen, Harry & Henkens, Kene, 2018. "Do people really want freedom of choice? : Assessing preferences of pension holders," Other publications TiSEM 448e8a93-9ded-401f-9da0-7, Tilburg University, School of Economics and Management.
    4. David-Jan Jansen & Robert Mosch & Carin Cruijsen, 2015. "When Does the General Public Lose Trust in Banks?," Journal of Financial Services Research, Springer;Western Finance Association, vol. 48(2), pages 127-141, October.
    5. Henriette Prast & Federica Teppa & Anouk Smits, 2012. "Is Information Overrated? Evidence from the Pension Domain," DNB Working Papers 360, Netherlands Central Bank, Research Department.
    6. Joseph F. Quinn & Kevin E. Cahill, 2015. "The New World of Retirement Income Security in America," Boston College Working Papers in Economics 887, Boston College Department of Economics.
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