Pension profile preferences: the influence of trust and expected expenses |
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Authors: | Carin van der Cruijsen |
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Institution: | Research Department and Payments Policy Department, De Nederlandsche Bank, Amsterdam, The Netherlands |
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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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Keywords: | Consumer choice consumption trust pension annuities lump sum |
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