New code encourages insurance companies

ISTANBUL - Hürriyet

The new private pension system is anticipated to grow the sector.

Professionals anticipate sector growth in response to the new private pension system that allocates the government match 25 percent of participants’ contribution.

We expect participants to rise by 500,000 and fund size to reach 28 billion Turkish Liras with the new private pension system coming into action, said Mete Uğurlu, the general director of Anadolu Hayat Emeklilik. “With the state incentive the system will become more efficient as participants can benefit easier. Tax reduction will be over and state contribution system will come into use,” he said.

As of today, there are 3 million participants in the private pension system who have paid almost 16 billion liras up until now.

Cemal Onaran, general director of Garanti Emeklilik also said that private pension companies have cleared their deck for 2013 and are making plans to reach new people who haven’t yet benefited from the system.

The government has spared 1.25 billion liras for support in the private pension system in the 2013 budget, which was approved by Parliament last week.

The undersecreteriat of the treasury will pay 25 percent of the pension to participants every month as a state contribution.

The Finance Ministry has predicted 5 billion liras worth of contribution from both current participants and newcomers and allocated 1.25 million liras as 25 percent of 5 billion liras, revealing its expectation for the new system for the first year.