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An appraisal of Turkey's voluntary individual pension system from a perspective of pension equality
Author(s) -
Babat Sertac,
GultekinKarakas Derya,
Hisarciklilar Mehtap
Publication year - 2021
Publication title -
social policy and administration
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.972
H-Index - 63
eISSN - 1467-9515
pISSN - 0144-5596
DOI - 10.1111/spol.12659
Subject(s) - pension , inequality , private pension , economics , solidarity , perspective (graphical) , labour economics , turnover , subsidy , public economics , pension system , business , demographic economics , political science , finance , market economy , mathematical analysis , mathematics , management , artificial intelligence , politics , computer science , law
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.