Dynamic social security after the crisis: Towards a new welfare state?


Diamond P. , Lodge G.

International Social Security Review, vol.67, pp.37-59, 2014 (Refereed Journals of Other Institutions) identifier

  • Publication Type: Article / Article
  • Volume: 67
  • Publication Date: 2014
  • Doi Number: 10.1111/issr.12047
  • Title of Journal : International Social Security Review
  • Page Numbers: pp.37-59

Abstract

The returns from individual account pension plans are subject to fluctuations in capital markets. This increases income uncertainty for the beneficiary and exposes individuals to the risk of fluctuations in the economy in general and the stock market in particular. A minimum pension guarantee is a way to avoid this pitfall by providing a minimum annuity regardless of the actual investment performance of individual accounts. In this article, we present a cost analysis of a minimum benefit guarantee mechanism for the voluntary Individual Pension System in Turkey. We examine the cost estimates and the probability of providing guaranteed payments under various economic and demographic assumptions.