Türkiye Case Study - How Incentives Can Boost Pensions For Informal Sector Workers

Overview

This case study examines Türkiye’s pension reforms, which replaced tax incentives with direct government matching contributions in its voluntary private pension system (BES). Introduced in 2013, the reform expanded incentives to non-taxpayers, including informal workers, and was associated with significant growth in voluntary pension participation. The government match was increased from 25% to 30% in 2022, further strengthening incentives, while contribution limits linked to the minimum wage have also supported higher savings. Türkiye introduced auto-enrolment for public and private sector workers in 2017, although opt-out rates remain high. The system also includes an additional incentive for savers who convert their balances into long-term retirement income products.

Türkiye’s experience shows that direct matching incentives can significantly increase pension participation, particularly in countries where tax-based incentives exclude large segments of the workforce.