Domestic savings and the individual retirement system: Turkey keys

The main aim of the present study is to investigate the effects of Private Pension System (PPS) on domestic savings rate in Turkey by examining the practice and structure of Private Pension System in Turkey. Private Pension System arising as supplementary of public social system has been in service both in developed and in developing countries in recent years. Although Private Pension System first arose to overcome the deficiencies in public social security system, it creates some effects on many macro-economic capacities of countries. It has been determined in many studies that the most important of these macro-economic variables is domestic savings. Developing countries which have capital savings inadequacy in financing of growth and development must increase their domestic saving rates in order to sustain their growth. The most important policy of developing countries to increase their domestic savings has been to popularize the Private Pension System. Within this scope, in the present study, which I have fulfilled as a master's thesis, Turkey practice, structure, institutional and legal arrangements of Private Pension System and its progress in Turkey have been investigated. The effect of legal arrangements in Private Pension System has been examined as a comparative analysis through quantitative and qualitative data sets collected from the World Bank and Turkish Statistical Institute data pool. As a result of this analysis, it has been determined that there has been an increase trend within the last ten years, in other words, Private Pension System has positively affected domestic savings.