Özet:

The definiton of individual pension can be state as a private pension that allows individuals to increase their welfare levels after retirement, reduce the burden of social security from the public sector, create long-term funds in the financial sector, improve the health of the financial system, reduce corporate investment strategies and fluctuations in the markets, fight inflation, steadily grow and deepen capital markets system. Social security institutions of developed or developing countries around the world are confronted with various crises from time to time as they operate. The length of the average human lifespan, the breakdown of the income-expenditure distribution, the increase in the costs of health services, the interventions of governments on health insurance, economic instability, inflation and unemployment negatively affect the activities of social security institutions around the world. In addition, these problems have an impact on retirement payments and cause retirement age to rise. Due to these issues, the search for new financial products has been made and as a result the individual pension system has emerged. This study reviews the practice of the individual pension system around the world as well as Turkey. In this study, it has been determined that in some countries the individual pension system is obligatory and in other countries it is not. For instance, Chile, Uruguay, Bolivia and Mexico, participation in the private pension system is compulsory, while in the OECD countries the individual pension system is complementary to existing social security systems, and systematic participation is based on voluntary action. One of the most important features of the pension system in Turkey is that it is not an alternative system to the current social security system it is used a substitution of the current social system. Participation in the system has been partially compulsory since the individuals who participate in the system compulsorily can leave the system after 60 days. Individual who does not want to leave the pension system would like to spend a portion of their savings after retirement and to have a higher income during retirement. It can be said that this collected fund has reduced the cost of funding and it has contributed positively to economic and financial stability by causing long-term investments in finance sector to increase.

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