Trust and the behavioral economics of automatic enrollment in pensions: a comparison of the UK and Poland

Experience in the UK with auto enrolling workers in pensions indicates that once enrolled, most workers stay enrolled, suggesting that auto enrollment may be a desirable policy for other countries. However, the experience with auto enrollment is much different in Poland. This paper examines the argument that inertia is not a strong force when workers distrust in the security of future pension benefits. We present a simple conceptual framework where trust affects the subjective probability distribution of workers relating to future pension benefits. We investigate how this framework might explain the high opt-out rate in Poland.