Would you trust the pension system?

Studies on social capital often suggest that trust towards administration and the trust towards political system are connected to the level of generalized trust (i.e. trust towards other people). It has also been stated, that the level of trust is higher in Nordic countries where the social security system is universal – comprehensive, developed and complex – maybe more so than in some other Western countries. Thus, it is a known fact that at the beginning and the end of their life span, people typically consume more than they produce. This results in a deficit, which is covered by direct and indirect reallocations of income from the working-age population. The Finnish pension system is based on the pay-as-you-go principal and partial funding. It is mainly the working population that pays for the benefits of the retired population.  Each generation thus receives funding for their pensions from the younger generation. 

Drawing on a nationally representative data (N = 2495) that was collected by the Finnish Centre for Pensions during the summer of 2011 this paper explores the trust towards the Finnish pension system. The set of data allows analysis on how the Finnish pension system is seen through the eyes of Finnish citizens. The data provides a unique insight to the differences in how different people relate to the system in terms of their background. This paper outlines differences in trust according to gender and age but also socioeconomic factors such as education, occupation and income.