EFFECTS OF GLOBAL FINANCIAL CRISIS ON TURKISH INDIVIDUAL PENSION SYSTEM
Journal Title: Journal of the Human and Social Science Researches - Year 2014, Vol 3, Issue 2
Abstract
Developments in health sector and increases in welfare have raised the life expectancy of people. The individuals living longer than projected by pension schemes have posed a threat for financial sustainability of public pension systems which mostly have defined benefit pension plans. Countries have shifted from defined benefit plans generally based on pay as you go to funded defined contribution plans based and from single-tiered pension system to multi-tiered pension system in order to both maintain financial sustainability of public pension systems and enable individuals to maintain their standards of living at retirement. However large fluctuations in assets and returns of pension funds during financial crises have shaked individuals’ confidence in funded pension plans. We examine the effects of global financial crisis on Turkish individual pension system in light of data provided from Pension Monitoring Center and Organisation for Economic Co-operation and Development by using descripyive analysis. We found that there was significant slowdown in rate of increase in total net asset value of individual pension funds, negative returns provided by pension funds comprised of predominantly common stocks, therefore a shift from common stocks to bonds in asset allocation of pension funds and a significant slowdown in rate of increase in number participants to individual pension system during global financial crisis.
Authors and Affiliations
Yılmaz BAYAR*| Yrd. Doç. Dr., Karabük Üniversitesi, İşletme Fakültesi, İşletme Bölümü, yilmazbayar@karabuk.edu.tr, Metin KILIÇ| Yrd. Doç. Dr., Karabük Üniversitesi, İşletme Fakültesi, İşletme Bölümü, metinkilic@karabuk.edu.tr
Keywords
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