Pension system in Turkey is sounding the alarm

The Global Pension Report published by Allianz reveals that Turkey is in need of serious reforms due to its aging population and inadequate pension payments.

Allianz has published the third edition of its Global Pension Report, issuing significant warnings regarding Turkey's pension system.

The report states that the sustainability of the pension system is at risk due to Turkey's aging population and low pension payments.

The proportion of the elderly population in Turkey is expected to rise from 25 percent to 35 percent over the next 25 years. This situation poses a serious threat to the future of the pension system. Allianz notes that while Turkey is in a more advantageous position compared to European countries, it will still have to grapple with the issue of aging.

The fact that pension payments remain far below the final earnings of retirees during their working lives makes it difficult to maintain living standards. The report highlights the need for gradual improvements in Turkey's pension system and emphasizes the importance of developing funded models, pointing to countries like Denmark, the Netherlands, and Sweden as examples for taking early steps toward sustainable pension systems. Japan is noted for its long life expectancy and the fact that a large portion of its elderly population continues to work.

The Allianz report emphasizes that Turkey needs a comprehensive reform plan to increase the long-term security of its pension system. While low private savings rates hinder the growth of Turkish pension funds, the inadequacy of pension payments and the scarcity of job opportunities for older workers are among the most urgent issues that need to be addressed.