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

Author

Listed:
  • Glenn P. Jenkins

    (Department of Economics, Queen's University, Kingston, Canada and Eastern Mediterranean University, North Cyprus)

  • Godwin O Olasehinde-Williams

    (Department of Economics, Eastern Mediterranean University, North Cyprus)

  • Roya Amel

    (Department of Banking and Finance, Eastern Mediterranean University, North Cyprus)

Abstract

This study addresses economic issues associated with the private defined benefit pension system in Turkey. The institutional arrangements in Turkey for administering the government securities held in such pensions are compared with two private defined contribution pension schemes in Canada. In Canada, pension participants can hold the insured securities of banks instead of government securities. In turn banks charge no management fees on pension accounts that hold such securities. In the Turkish private pension system, more than 20% of the total value of the pension investments in government bonds are lost through administration costs. In addition, there is a net fiscal cost to the Treasury of Turkey. Although the net return received by pension holders is approximately the same as in the Turkish system, taxes are fully collected in Canada on either the proceeds of the pensions or on the taxable income used to finance the private pension assets.

Suggested Citation

  • Glenn P. Jenkins & Godwin O Olasehinde-Williams & Roya Amel, 2019. "Private Benefits, Fiscal Costs, and Economic Resource Costs of the Private Defined Contribution Pension Systems in Turkey," Development Discussion Papers 2019-02, JDI Executive Programs.
    • Handle: RePEc:qed:dpaper:4512
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    References listed on IDEAS

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    More about this item

    Keywords

    Private pensions; Turkey; pension administration costs; economic resource cost; Canada;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

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