Turkish individual pension system: from voluntary basis to automatic enrolment

ABSTRACT

This article discusses the introduction and development of the Individual Pension System (IPS) in Turkey within the framework of neoliberal pension transformation throughout the world. The article attempts to analyse the thirteen-year experience of the IPS from a critical perspective in line with the proliferation of private pension accounts in the countries of the South by the impact of International Financial Institutions (IFIs). The author argues that, unlike the other countries of the South, a mandatory private pension system could not be achieved in Turkey due to economic, social and political conditions. In other words, Turkish pension system is still characterised by a large public pillar. Nevertheless, the ruling government has initiated automatic enrolment in order to make the system an efficient pension pillar instead of a short-term saving model. It also aimed to provide a regular flow of funds to financial markets.

KEYWORDS:

• Pension reform
• Turkey
• individual pension system
• automatic enrolment

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. Figures are gathered through the scanning of 2003 Annual Report of Insurance and Private Pension Activities in Turkey of the Treasury and the IPS Progress Reports of the Pension Monitoring Centre for 2004–2016.

Additional information

Notes on contributors

Burcu Gökçe Yılmaz Akın

Burcu Gökçe Yılmaz Akın graduated from Middle East Technical University Business Administration Department in 2002. Then, as a Jean Monnet scholar of European Commission, she studied at European Studies Department in Leiden University for MA degree during the period of 2004–2005. She also holds an MSc in European Communities (Economics–Finance) from Ankara University (2006). She has successfully completed her PhD in Middle East Technical University (International Relations) in 2014. Her research areas are mainly international political economy, state–capital relations, neoliberal transformations and the welfare-state.