Turkey raises pension sales target
TURKEY - Turkey’s private pension sales will reach 350,000 policies for the entire 2004, up 16.6% from an initial target of 300,000 industry sources have said.
“There is every indication that the industry will overshoot this year’s target,” said Kemal Olgac, general manager for Koc Allianz Emeklilik, a pension fund managed jointly Turkish insurer Koc Sigorta and Allianz. “We estimate 2004 sales at 350,000 policies.”
Olgac said that although individual sales this year have done better than expectations, corporate sales were still slow. “It will take time before we have a corporate turnover proportionate with the size of the (Turkish) economy,” he said. “Companies are presently quite reluctant to buy group policies because of heavy taxes on employment.”
Industry sources said more than 200,000 policies have already been sold this year which makes strong prospects for the industry for the years ahead. Ninety-five percent of the sales are individual policies.
“Growth will gain pace from 2005 as corporate sales should pick up,” said Erhan Tuncay, general manager for Garanti Emeklilik, private pension arm for Garanti Bankasi, one of Turkey’s top five privately-owned banks.
Turkey launched private pension funds in October 2003. Under the present legislation, companies are allowed to report group policies as part of corporate expenditures – and thus have tax cuts.
“The Cabinet has the powers to broaden the tax advantages for the industry,” said Tuncay. “More tax breaks would boost corporate demand for group policies.”