| Abstract: |
Pension schemes in the Netherlands allow workers to redistribute their own
pension wealth to increase the survivor pension of their partner. However, due
to lacking communication and knowledge of survivor pensions among workers, and
also due to the lack of transparent products and choice architecture,
redistribution remains limited. This paper uses a stated preferences
experiment that is explicitly designed for workers with a partner in the age
group of 55 to 65 years to elicit their pension redistribution preferences. We
find that, on average, the preferred pension wealth redistribution amounts to
50%. 35% of all individuals have such a preference. 33% of all individuals
would prefer less redistribution, and 32% percent prefers to redistribute more
pension income to the partner upon one's death. We further show that total
family income during working life does not affect the redistribution to
survivor pensions. However, the distribution of the contribution to total
family income before retirement across partners, as well as the survival
likelihood of the partner and the number of years the partner is expected to
survive, have a significant causal impact on the preferred pension
redistribution decision. The preference for redistribution to survivor
pensions also depends significantly on personal characteristics, preferences
and social attitude. Males have a significantly stronger preference for
redistribution compared to females. Moreover, forward-looking, more risk
averse and more altruistic individuals have a stronger preference to
redistribute part of their pension wealth to a survivor pension. Finally, in
particular when employees have the perception that their partner is more
forward looking, they are willing to invest more in a survivor pension. |