An appraisal of Turkey's voluntary individual pension system from a perspective of pension equality

Babat S., Gultekin-Karakas D., Hisarciklilar M.

SOCIAL POLICY & ADMINISTRATION, vol.55, no.5, pp.784-801, 2021 (SSCI) identifier identifier

  • Publication Type: Article / Article
  • Volume: 55 Issue: 5
  • Publication Date: 2021
  • Doi Number: 10.1111/spol.12659
  • Journal Name: SOCIAL POLICY & ADMINISTRATION
  • Journal Indexes: Social Sciences Citation Index (SSCI), Scopus, Academic Search Premier, International Bibliography of Social Sciences, Business Source Elite, Business Source Premier, Geobase, Index Islamicus, PAIS International, Political Science Complete, Public Affairs Index, Social services abstracts, Sociological abstracts, Worldwide Political Science Abstracts
  • Page Numbers: pp.784-801
  • Keywords: multi-pillar pension system, pension inequality, pension reform, Turkey
  • Istanbul Technical University Affiliated: Yes

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.