Abstract:

This study is based on the new Private Pension System’s assessment (PPS) and changing in PPS’s incentive mechanism. The study consists of five parts: In the first part, general information is provided about why Turkey needs to employ PPS and what are the expected benefits from PPS. In the second part, old PPS system is mentioned. In the third part, amendment in the incentive system is discussed. In the fourth part, old and new system is compared via some examples on the alternative instances subject to tax cut. Finally, some suggestions are presented by assessing whether new incentive system is beneficial. According to the findings, new incentive mechanism fosters investment rather than consumption. Primary effect in the new incentive mechanism is not the direct state contribution but changing in tax base of the tax cut. Participants respond positively to this new incentive system.

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