Private Benefits, Fiscal Costs and Economic Resource Costs of the Private Defined-Contribution Pension Systems in Turkey

This study addresses some of the key economic issues associated with the private defined-benefit pension system in Turkey. The institutional arrangements in Turkey for administering the government securities in such pensions are quantitatively compared with those of two defined-contribution pension schemes in Canada. Private pensions in Canada can hold the insured securities of banks instead of government securities. In the Turkish private pension system, more than 20 percent of the total value of the pension investments in government bonds is lost through the costs of administration. In Canada such costs are eliminated for holdings of riskless bank securities.