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Ageing and Society

Table of Contents - 2010 - Volume 30, Issue 05  

Research Article

Perceptions and expectations of pension savings adequacy: a comparative study of Dutch and American workers

HENDRIK P. VAN DALENa1a2 c1, KÈNE HENKENSa1 and DOUGLAS A. HERSHEYa3

a1 Netherlands Interdisciplinary Demographic Institute, The Hague, The Netherlands.

a2 Department of Economics and CentER, Tilburg University, The Netherlands.

a3 Department of Psychology, Oklahoma State University, USA.

ABSTRACT

What drives the perceptions of pension savings adequacy and what do workers expect to receive when they retire? These questions are assessed among married workers using an identical survey distributed to Dutch and American workers in 2007. Despite marked differences in expected pension replacement rates – where the Dutch replacement rates are systematically higher than the American rates – the perceived savings adequacy is more or less the same across Dutch and American workers. In both countries, about half of the respondents were confident they had amassed sufficient retirement savings. Individuals' perceived savings adequacy was found to be influenced by three groups of factors: trust in pension institutions (pension funds, banks, insurance companies and governments), social forces and psychological dispositions. This study shows that differences in the dispositions of workers (with respect to future orientation and financial planning) played a far larger role in explaining differences in perceptions of savings adequacy in the United States than in The Netherlands. Dutch workers rely and trust their pension fund and seem to leave thinking about and planning for retirement to its managers.

(Accepted October 28 2009)

(Online publication January 21 2010)

Key Words:

Correspondence:

c1 Address for correspondence: Hendrik P. van Dalen, Netherlands Interdisciplinary Demographic Institute, PO Box 11650, NL-2502 AR The Hague, The Netherlands. E-mail: dalen@nidi.nl