Determinants for the Decision to Opt Out of the Automatic Enrollment Pension Scheme in Türki̇ye
Year: 2024
Type: article
Study design: Observational Study
Abstract: Objective: This study aims to investigate the statistical association between the decision to participate or not in auto-enrollment pension scheme in Türkiye and socio-economic and attitudinal variables. It is motivated by the fact that Türkiye is one of the few OECD countries where the policy of automatic enrollment in complementary private pension scheme has not been successful due to high opt-out rates. Method: Logistic regression analysis is used to estimate the association between the dependent and independent variables. Data were obtained through convenience sampling from a survey conducted in 2018. The survey questions were asked face to face to 220 professional master's students working in the private sector, and online to 90 university graduates working in the private sector, for a total of 310 people. Results and conclusion: Our findings indicate lack of trust in long-term investment performance of pension funds and financial institutions. Past financial crises, uncertainty avoidance as an aspect of national culture, more uncertainty of Türkiye’s financial markets as well as worsening macroeconomic policy outcomes since 2018 have also a role in this lack of trust. Research implications: Our results suggest that the success of auto enrollment in the future depends partly on the appropriate change of economic factors affecting individuals' behavior. Increasing the number of similar analyzes is useful in order to compare the results across different data sets using similar questions. Value: This study is one of the very few studies conducted in Türkiye on the factors affecting the decision to opt out from automatic participation.
Author: Ayfer Karayel
Institution: Galatasaray University
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4404789802