A Minimum Pension Guarantee Application for the Individual Pension System in Turkey: A Gendered Approach

This thesis aims to shed light on the relationship between financialisation and pension reform in Turkey. In the last two decades, more than thirty countries have replaced their pay-as-you-go pension schemes with fully-funded schemes. Although the increasing significance of financial conduits within pension provision has been evident within this reform trend, the corresponding literature has failed to address adequately the key role that financialisation has played. Therefore, it is argued here that the recent pension reform in Turkey, not least the Individual Pension System, cannot be understood without considering financialisation of the Turkish economy. Financialisation refers to both the extensive and intensive growth of finance, i.e. integration of financial activities into ever more aspects of economic production and social reproduction processes as well as the deepening of financial activities in line with the proliferation of more sophisticated financial operations/instruments. The expansion of finance within pension provision highlights the ability of finance as money capital to capitalise different forms of monetary streams. Thus, finance transforms the financial and non-financial sectors and is integrated into the everyday lives of households while financialisation of pension income is one of the overlooked financialisation practices. The private pension scheme in Turkey mostly serves the middle- and high-income earners revealing the generally adverse impact of financialisation on those in unfavourable labour market positions – women, informally employed and unemployed being the most vulnerable. The intensification of finance, on the other hand, is evident in the supply and demand side impacts of pension funds on capital markets. Accordingly, pension funds transfer massive flows to capital markets, thus pushing up asset prices. Moreover, pension funds, as they mature, demand more innovative investment instruments to meet their liabilities. In the Turkish capital markets’ context, these impacts of pension funds are observable despite their recent origins.

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