Agency problems in the private pension system of Turkey: pension sector employee perspectives

Remziye Gül Aslan

Qualitative Research in Financial Markets, 2022, vol. 15, issue 1, 142-159

Abstract: Purpose - This study aims to examine how the governance structure of the private pension system of Turkey affects the extent of agency problems through a qualitative exploratory analysis of the pension sector employees’ perspectives. Design/methodology/approach - This study is based on qualitative exploratory research, which includes semi-structured interviews with 13 pension sector employees to investigate their perspectives on agency problems within Turkey’s private pension system. Data from interviews are analyzed by using the thematic content analysis method. Findings - This study shows us that agency problems are prevalent in Turkey's private pension system, especially in the relations between pension company employees and participants. This study highlights four vulnerabilities of governance structure: the incapacity of governance structure to prevent pension companies as institutional agents from risky operations and transactions, the ability of local capital groups to use their controlling power for effecting fund management operations, the incapacity of the governance structure to prevent the employment of agents with inadequate qualifications, the lack of proper legal and regulatory framework for ensuring sufficient information disclosure to participants during contract-making and fund selection processes. Originality/value - Previous research on the agency problems in the private pension schemes mostly investigated the issue from the viewpoint of participants. Thus, exploring agency problems from the agents’ point of view will be a contribution to the literature while illuminating the underlying structural problems within the system.

Keywords: Principal–agent theory; Pension fund governance; Agency problems (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eme:qrfmpp:qrfm-07-2021-0120

DOI: 10.1108/QRFM-07-2021-0120

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