Yaman: A Critical Review of Private Pension System in Turkey Considering the German System

ABSTRACT:

Private pension system includes various measures met to continue existing living standards without any restrictions in old age, i.e. after the end of employment. High life expectancy, low birth rate, and institutional deficiencies in societies are major drivers for private pension. To understand seriousness of the topic mostly state pension claims are considered as being insufficient in old age. That’s why, necessity of private pension products results. In the first part, theoretical approaches to the explanation of savings behavior of people are described. In the second part of the study, the situation concerning precautions taken in Turkey is examined. In the following part, the retirement arrangements in Germany are depicted for comparison. The financial situation of elderly people in both countries is analyzed. Financial sector is the key beneficiary of developments in both countries. Governmental regulations concerning retirement system play crucial role to achieve high level of prosperity in the national economy of many developed countries. It is also seen in the study that industrialized nations are characterized by considerable private pension funds. Finally; some conclusions are drawn from the analyses performed in the study.

 

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