The Shortcomings of Pension System in Turkey: Solutions with a New Model Proposed

Year 2019, Volume: 5 Issue: 2, 23 - 48, 31.07.2019

Levent Sümer , Beliz Özorhon

https://doi.org/10.25272/ijisef.559898

Cited By: 2

Abstract

Investing for retirement years due to the future
income concerns is one of the main reasons for people to make savings. Pension
funds have always been important tools that match the idea of future
investments. Despite the rapid development and increase in size of the Turkish
pension system in the last few years, major improvements and amendments in the
current system is required for increasing the total size to OECD level, as well
as attracting more participants by increasing the returns and providing
alternative investment options. This study investigates the Turkish pension
system and suggests a new model to solve the current problems of the system by
structuring a sustainable model which may also be applied worldwide. A
comprehensive pension system and comparative return analysis of different
investment tools are conducted, and the new model is proposed based on creating
new pool of new investment tools consists of asset-based capital market
instruments that are issued for long-term specific investment projects
financing. While the new model brings new perspective to pension system, it
also helps solving the problems of both the current pension system and the
financing of investment projects. In the study, policy recommendations and
suggestions for major amendments to current pension system regulations are also
made.

Keywords

pension system, interest free investments, PPP model, asset based financing

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