Altun, Tülın; Aydın, Aykut

In Turkey, significant changes have been made in the legislation of Individual\rPension System (IPS) in 2012 (matching contribution system has been introduced) and\r2016 (Automatic Enrollment System has been established). Thus, behavioral\rinstruments which can be defined as libertarian paternalistic, such as default rules and\rframing, have begun to be used more effectively in IPS. When the progress in IPS\rbetween the years 2003-2021 is examined, it has been determined that behavioral\rinstruments have a positive effect on the savings in the system, but these effects are\rsmall. It was concluded that the participants decided to continue or exit IPS with rational\rreasons. Participants who can benefit from full state subsidy in shorter time, have higher\rcontinuation rate and contribution amounts in the system. Participants exit the system\rwhen exits are optimal (such as after 36th months when they are entitled to benefit\rfrom the minimum state subsidy, and after the 5th year when entrance fees are no\rlonger charged). With rational reasons like the real return of IPS being lower compared\rto alternative investment instruments and its fund management fees being high, the\rhouseholds in Turkey either do not prefer saving on IPS or see the IPS as a short-term\rsaving instrument.