Problems and Solution suggestions of the private pension system under the age of 18 in Turkey: A Comparative Analysis on Private Pension Employees

This qualitative research examines perceptions and experiences regarding the Individual Pension System for those under 18 years of age from the perspectives of the system's two main stakeholder groups: individual pension companies and banks. Data was collected from a total of 25 participants, comprising 14 pension company employees and 11 bank employees, through semi-structured interview forms. Eighteen participants were female and seven were male. The interviews were conducted predominantly online for pension companies and predominantly face-to-face for banks. Participants held various positions, including private client manager, fund and asset management director, marketing specialist, sales representative, operations manager, and portfolio manager. This diversity enabled the findings to gain a multi-layered perspective touching on both strategic and field applications. The data was analysed using content analysis methods, and findings were identified around four main themes: the advantages and disadvantages of BES for under-18s, parents' level of knowledge and awareness, factors influencing parents' decisions to enrol their children in the system, and areas for improvement and policy recommendations. Participants stated that they perceived the BES for those under 18 not merely as an extension of the existing BES, but as an area requiring differentiation specific to the life cycle needs of children and young people. Participation in the system at an early age, long-term accumulation, the compound return effect, and the capacity to instil savings habits stood out among the strengths of the system. However, it was observed that the 56-year retirement threshold creates motivational barriers for children's contracts, the principle of voluntariness makes it difficult to maintain contributions, and rules on interruptions and entitlements in cases of early exit or contract transfer increase the perception of complexity. Costs and deductions, particularly the expectation of low costs for children's plans, have become more pronounced. Reducing or eliminating entry fees, easing management expense deductions, and promoting family-sized packages have been highlighted as factors that will facilitate participation. In terms of liquidity, partial withdrawal options linked to education expenses have come to the fore, and the prevalence of gold and gold-indexed funds in fund preferences has been noteworthy. Nevertheless, it has been observed that the right to change funds is used to a limited extent and that users continue to need guidance. In decision-making dynamics, parents' search for future security, the need for education financing, and the motivation to institutionalise savings discipline were found to be decisive. While state contributions emerged as a factor increasing the perceived total return, sensitivity to fees/deductions, process burden, and information gaps created limiting effects on participation and continuity. The speed, accessibility, and ease of remote transactions offered by digital channels, however, stand out as a positive experience dimension. Notable differences have emerged between the perspectives of banking and pension companies. Pension company employees focus on system design, fund architecture, entitlement/deduction transparency and process coordination, while bank employees emphasise behavioural and operational elements such as campaigns, small rewards, points/gold-based incentives, fast application processes and family packages. Both groups noted an upward trend in financial literacy, but also highlighted the continuing need for support in fund management, deduction scope, and entitlement levels. Consequently, the early start advantage of BES for those under 18 years of age, its long-term savings potential, and its role in planned savings within family budgets place it in a favourable position. However, the age threshold, cost sensitivity, information gaps, and challenges posed by the voluntary nature of the system are decisive factors in participation and retention rates. The study comprehensively presents findings on advantages, disadvantages, awareness and knowledge levels from the participants' perspective, as well as factors influencing decision-making processes and recommendations, providing a guiding framework for implementation and policy design.