Pensions and the paradox of trust: Developments over the past 25 years

Because of the generally long time period between the accrual of rights to a pension and the receipt of a pension, trust by workers is a key underlying aspect of the development of pension systems. Trust in pensions is an important prerequisite for voluntary participation by workers in pension systems. It also plays a role in the decision to opt out for people who have been automatically enrolled in a pension plan. Surveys investigating the level of trust around the world show large differences across countries. This paper focuses on changes in people's level of trust as they affect the development of pension systems over the past 25 years. It explores issues as to the level of trust by pension participants and nonparticipating workers, pension funds, and employer pension plan sponsors in government, politicians, financial service providers, and financial markets.