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Reforming the Pension System in Turkey: Comparison of Mandatory and Auto-Enrollment Pension Systems in Selected OECD Countries – OECD – June 2019

17 July, 2019

Saving little in retirement is a common phenomenon. Most people do not limit their consumption during their working years, not even to enjoy a higher and guaranteed lifetime income during retirement. Governments have been promoting a number of traditional and behavioral policy tools, aimed at increasing participation and contribution rates in individually funded pension plans. While traditional tools, such as tax incentives and shared contributions, can have some positive effects in promoting retirement savings, their impact is still limited when it comes to generating new savings.

This document reviews the case of Turkey and suggests several tools for promoting retirement planning. Section I provides a review of the traditional and behavioral policy instruments designed to promote retirement savings, along with a discussion of their effectiveness. Section II offers an in-depth comparative analysis of eight countries that have implemented mandatory and auto-enrollment pension systems. Section III provides an outline of the Turkish pension system and suggests policy measures for reforming the auto-enrollment system in Turkey. This country´s experience, according to the report, can provide an interesting case study for future implementation of automatic enrollment programs in other countries.

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