An appraisal of Turkey's voluntary individual pension system from a perspective of pension equality. (25th October 2020)

• Record Type: Journal Article
• Authors: Babat, Sertac; Gultekin‐Karakas, Derya; Hisarciklilar, Mehtap
• Is Part Of: Social policy & administration. Volume 55:Number 5(2021)
• Page Start: 784
• Page End: 801
• Publication Date: 2020-10-25
• Subjects: multi‐pillar pension system -- pension inequality -- pension reform -- Turkey; Social policy -- Periodicals; Public administration -- Periodicals; 361.6105
• DOI: 10.1111/spol.12659
• Languages: English
• ISSNs: 0144-5596

Abstract

Abstract: Since 2003, Turkey's pension policy has been increasingly based on facilitation of individual savings administered by private pension funds. The introduction of private pensions is expected to reinforce inequalities as a result of socio‐demographic features and pension system design. This article evaluates voluntary individual pension system with a perspective on pension equality. Monthly contributions to pension accounts are explored on the basis of socio‐economic and demographic characteristics of the customers of a currently operating pension company. Findings reveal that differences in people's saving capacities have become a source for pension inequality. Furthermore, state subsidies, which increase in proportion to individual contributions, strengthen unequal distributional dynamics. Pension privatization harms social solidarity as it intensifies existing social inequalities.