Trust in pension funds, or the importance of being financially sound

Hendrik Peter van Dalen, C.J.I.M. Henkens

Research output: Contribution to journalArticleScientificpeer-review

52 Downloads (Pure)

Abstract

Is the trust that participants have in their pension fund affected by its funding ratio (i.e., asset/liabilities ratio)? Based on survey, carried out in October 2021, among Dutch pension fund participants we link our survey data to the funding ratio of their pension fund as registered by the pension regulator. First, we show that the level of the funding ratio of their pension fund is positively associated with the trust level of participants. Pension funds with large buffers are associated with a high level of trust. Second, sub-group analyses show that the trust of younger participants is weakly related to the level of the funding ratio and this association is strong and positive for older (55+)/retired participants. It suggests that an interest in or awareness about the financial health of one's pension fund is associated with a higher responsiveness of participants in terms of trust. And third, firm-based pension funds enjoy a higher level of trust compared to sector-based pension funds.
Original languageEnglish
Article number147474722200021
Pages (from-to)658-669
JournalJournal of Pension Economics & Finance
Volume22
Issue number4
Early online dateOct 2022
DOIs
Publication statusPublished - Oct 2023

Keywords

  • Pension funds
  • Trust
  • buffers
  • Funding ratio

Fingerprint

Dive into the research topics of 'Trust in pension funds, or the importance of being financially sound'. Together they form a unique fingerprint.

Cite this