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

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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