Social security systems in the world, their effects on savings and situation in Turkey

There is an escalating debate about the scope and structure of national pension systems in last 15 years. In the heart of the debates, there is a desire to improve social protection in concert with improving economic conditions and respond to changing demographics, unemployment, economic and political effects. Supplementary private pension programs and voluntary individual savings accounts with tax advantage are being applied in most developed countries of the world.However public pensions are critical institutions destined to become even more important as population ageing continues throughout the world. In Turkey also a "Social Security Reform" project exists for restructuring purposes. In this respect, it is expected that capital accumulation and flowing funds to financial markets will increase. The purpose of our study is, understand the financing of the social security systems in the world and Turkey. In addition to analyze the effects of social security on private savings in Turkey. The data available for the social security institutions in Turkey starts from 1970s. The private savings are not so high respectively. Time series analysis includes 1972-2003 data and the OLS results shows a significant and pozitif relationship between private savings and social insurance premiums. Keywords: social security, private savings, pay as you go systems, funding.defined contribution, defined benefit.