Turkish reforms tonic for pensions
Turkish assets pension mutual funds have grown to TRL1bn (€621m), the country’s pension monitoring centre (PMC) says. The voluntary Individual Pension System, launched in 2003 as a part of social security reform in Turkey, has completed its second year.
According to the PMC’s quarterly report, the number of pension contracts reached 646,280, up from 248,942 a year before. The total amount of the pension mutual funds increased to TRL1bn by November, from TRL175m a year ago.
The report says the number of pension plans provided by the 11 pension companies has grown by 44 to 167.
The centre notes that the new regulations aimed at introducing vesting periods and fund transfer opportunities, was “expected to boost the group contracts in the next few years”.
The IMF noted recently that Turkey’s pension deficit had risen from 2.5% of gross national product to 3.5% in 2004 – and that it was set to widen to “around 7% of GNP in the long run”. It continued: “Without reform, the overall social security deficit was projected to double from its current level of 4.5% of GNP.”