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Assessing a minimum pension guarantee for the voluntary IPS in Turkey
Author(s) -
Sahin Sule,
Elveren Adem Y.
Publication year - 2011
Publication title -
international social security review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.349
H-Index - 28
eISSN - 1468-246X
pISSN - 0020-871X
DOI - 10.1111/j.1468-246x.2011.01401.x
Subject(s) - pension , annuity , economics , beneficiary , pension plan , capital market , turnover , stock (firearms) , payment , actuarial science , stock market , business , life annuity , finance , mechanical engineering , management , engineering , paleontology , horse , biology
The returns from individual account pension plans are subject to fluctuations in capital markets. This increases income uncertainty for the beneficiary and exposes individuals to the risk of fluctuations in the economy in general and the stock market in particular. A minimum pension guarantee is a way to avoid this pitfall by providing a minimum annuity regardless of the actual investment performance of individual accounts. In this article, we present a cost analysis of a minimum benefit guarantee mechanism for the voluntary Individual Pension System in Turkey. We examine the cost estimates and the probability of providing guaranteed payments under various economic and demographic assumptions.