Abstract

Private pension system exists in many developing and developed countries. The practice of the system differs along various dimensions among these countries. A retirement saving vehicle that is increasingly important is the individual retirement account (IRA). Different from the existing examples of private pension systems, the incentive mechanism in the Turkish case is the direct government contributions to the savings in IRAs. IRA has only a decade history and it is quite a new private pension system in our country. For this reason individuals are hesitant to be involved in the system. Therefore this study aims to determine people’s behaviors toward the individual retirement accounts. The study conducted 700 people who live in Karabuk. Snowball sampling method has been used for reaching the sampling. Data were collected via to a demographic information form and behaviors about individual retirement accounts form. Results displayed that the rate of the people attending the system (%61,1) is higher than those who are not attending (%38,9) the system. Almost all individual who has IRAs preferred banking. 57.7 percent of individual who do not have IRAs, are considered to be involved to the pension system. Almost half of the participants (47,4%) have enough knowledge on the IRAs. 57.3 % of the individuals think that IRA is an “investment vehicle”. The average score of “investment possibility” (M=4.5, S=0.6) was the highest and the mean score of “behavior of employees” (M=3.2, S=1.08)  was the lowest among the factors affecting to participation in IRAs.

Keyword: Individual Pension System, retirement plan, pension plan, Turkey, Indıvıdual Retirement Accounts