Within the scope of the project called “We are meeting for your retirement: Turkey is getting BESed”, Pension Monitoring Center (EGM) organized a panel at the Training Saloon of Çorlu Chamber of Commerce and Industry on 27 November 2018.
Taylan Türkölmez, Chairman of the Pension Monitoring Center, informed the participants about the BES system, which has completed its 15th year; and auto-enrollment system, which was launched two years ago. Underlining that the fund size of BES reached 85 billion TL and number of participants increased to 7 million, he stated that auto-enrollment reached 5.1 million participants in just two years. Türkölmez commented that the system’s performance in the last two years was pleasing, and said: “We need to keep investing in the system so that we can increase the quality of life for our society, whose life expectancy increases with each passing year.” Türkölmez added that we had no choice but save.
Savings in OECD countries reach up to 50 percent of their GDPs
Türkölmez stated that savings accumulated in the pension funds of OECD countries reached 50 percent of their GDPs on average, but was as low as 2.5 percent in Turkey. He added as follows: “When we look into the successful examples of auto-enrollment systems around the world, we see that those systems include employer’s contribution. Our system does not. This is a very important difference. We can see from those examples that employer’s contribution brings permanency to systems like auto-enrollment. We are aware of the challenges and hardships our employers have to face. When we try to include employer’s contribution in the system under the current economic circumstances, we know that they will have to shoulder an extra burden. However, there are ways to do it without bringing any additional burdens for the employers.” Türkölmez stated that they could work on a joint model which is based on sharing the burden of employers for the auto-enrollment system.
Final phase of auto-enrollment will be initiated as of 1 January 2019
The panel attracted great deal of attention from the members of the Çorlu Chamber of Commerce and Industry and Çorlu Commodity Exchange. During his speech, Türkölmez also shared information about the final phase of the auto-enrollment system which closely interests 400 thousand businesses with 5 to 9 employees. “The final phase that covers businesses with 5 to 9 employees will be initiated as of 1 January 2019. With those new entries, we will finalize the first stage of auto-enrollment. And as of April 2019, we will be entering a brand new dimension. According to the legislation, even if you leave the system, you will automatically re-enter after two years. Therefore, in April 2019, 6 million people who left the system in 2017 will re-enter the system.”