Turkey to consolidate pension institutions
TURKEY – The Turkish government has said it will pass legislation to include its three pension institutions under one organisation by the end of this year.
“By end-2003, we will enact new framework legislation with the aim to include all three pension institutions under one organization (the legislation would also enact any necessary parametric reforms to ensure the medium-term solvency of each individual fund),” it said.
The government made the comment in a submission to the International Monetary Fund dated April 5 and just made public.
“We will overhaul the administrative and institutional framework for managing social security,” it said.
And it would enact legislation “by end-April 2003” for the wage-earners’ fund, the SSK, and the self-employed workers’ fund the Bag-Kur and the Is-Kur social fund to establish “administrative mechanisms” to support earlier reform. The move would provide “firm legal grounds to implement our 2003 social security measures”.
The government said that its fiscal programme for 2003 would “fully protect social spending”, adding that it has already provided pensioners with additional support payments that amount to 0.9% of gross national product.
The commitment was made by economy minister Ali Babacan and central bank governor Sureyya Serdengecti in a letter of intent sent to Horst Kohler, managing director of the international Monetary Fund as part of a request for financial support from the IMF.
“The objective of our government is to unleash Turkey's development potential by providing a stable macroeconomic environment and implementing fundamental structural reforms,” they said.
Back in July 2002, the then-government said it would implement reform by the end of that year. The current government, which won a landslide election last November, acknowledges that structural reform has fallen short of meeting the IMF’s demands.
It blamed early elections, legal proceedings and other time constraints. On April 18, the IMF approved a further 701 million dollars in assistance to Turkey.