Turkey's private pension system participation rose by 27 percent in the first four months of 2014, says insurance company
ANKARA - Participation in Turkey's private pensions scheme has risen by 27 percent over the first four months of 2014 compared to the same period last year, according to data from insurance company Metlife Turkey.
Turkey’s private pensions scheme was launched in October 2003. In recent years, the sector has attracted several foreign players.
According to the private pensions scheme, the government contributes 25 percent of the pension to participants every month, raising citizens’ gains to 125 percent of their monthly rates.
"Turkey’s private pensions system has huge potentials," said Deniz Yurtseven, general manager of Metlife Turkey, on Tuesday.
"The 25-percent state contribution will continue in the remaining of this year and the system will grow steadily."
Yurtseven said that the fund value of participants increased to nearly 30 billion Turkish liras ($14.2 billion) from 26.3 billion liras ($12.4 billion) in the first four months of 2014.
According to a report released by Ernst & Young in 2013, investors from Europe and Asia whose consumption has slowed down, will turn towards Turkey which its young population, qualified labor force and new regulation pertaining to the 25 percent contribution.
The total number of participants reached 4,520,515 as of May 9 this year. Their contribution totaled 28.2 billion Turkish lira and nearly 1.8 billion lira came from government contributions. However, experts say that it still reflects a very limited participation in the system in a country of 76.5 million people.
At present, most firms are wholly (partly or joint venture) owned by foreign insurance groups, such as Groupama, ING, Aegon, Ergo İsviçre, Metlife and Avivasa. The system consisted of 18 firms as of May 9 2014.
In terms of assets under management, the leading company is Turkish-owned Anadolu Hayat Emeklilik with 5.6 billion liras, followed by Avivasa at 5.4 billion liras.
Nearly a third of pension policy holders in the system continue to be residents of Istanbul with 30 percent which constitutes the country's economic, cultural, and historical heart. Istanbul is followed by capital Ankara with 9.3 percent, Izmir with 7.6 percent and Antalya with 4.4 percent, where another 22 percent of all pension savers are based.
A vast majority, nearly 84 percent, of all pension policy holders in Turkey have a university or master’s degree.
Nearly 35 percent of the private pension users are between the ages of 25 and 34, while the ratio of customers younger than 25 years stands at merely 6.4 percent.
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