Page 8 - Turkinsurance Digital Magazine

8 at a glance

“The state contribution is the most important driving force and element of trust in
the interest in the BES’’

Atilla Benli, President of Benli continued his words as follows: “With the advantage of
the Insurance Association state contribution, our state provides all citizens of the Republic
of Turkey (TSB), stated of Turkey and blue card holders without exception, who are in-
that The Private Pension cluded in the system, with an additional 25 percent contribution,
System has become the which is not offered in any other investment vehicle and is unique
most important address of in the world. We see very clearly that the pandemic conditions
personal savings in Turkey were a factor in raising awareness about saving, and BES stood
within 18 years, proving out here along with the state contribution. In addition, more than
its worth in terms of its 6 million employees continue to save money today with the au-
well-established structure tomatic participation system, which began to be implemented in
and the ultimate benefit it 2017 and in which the state contribution is given to the contribu-
provides to participants and tions received from the salaries of employees. In the same way,
said: “Direct state support the fund size of 74.7 TL million and the state contribution of 8
of 25 percent, which began million TL were reached by entering our children under the age
in 2013, became the most of 80 thousand under the age of 18 into the system in a short
important driving force and period starting in June and as little as 4 months. The regulation,
element of confidence in the which allows 24 million children and young people under the age
growth of the system.” of 18 to benefit from state contributions in our country, will be
a very important development and a driving force in the develop-
As the Private Pension System (BES) is preparing to leave 18 ment of the system.”
years behind, during the time that has elapsed so far, with the 25
percent state contribution that started in 2013, the Automatic Atilla Benli pointed that increasing national savings rates is a
Enrollment System (OKS) implemented in 2017, and the oppor- must for a strong and sustainable economy and said: “Increas-
tunity to include children under the age of 18 in the system in ing national savings rates is a must for a strong and sustainable
June, it reached 13 million participants and a fund size of 193 economy and said: “The private pension system and increasing
billion TL. Atilla Benli, President of the Insurance Association the rate of domestic savings, which are the preconditions for
of Turkey (TSB), said: “Our private pension system has become sustainable economic growth model, the economy’s long-term
one of the most important factors that spread the savings habits financing capacity by ensuring the provision of the deepening
of Turkish people and contribute to the development of capital of capital markets is performing the function. In these aspects,
markets. The point we have reached and the fact that our state’s the private pension system is the most concrete step towards en-
trust in the system is increasing day by day increases our excite- couraging the increase of national savings with the advantages it
ment even more.” offers to participants.”

Benli made statements about the importance of state contri- According to the data released by the Pension Supervision
bution in BES. Benli emphasized that in the Private Pension Center (EGM) on October 8, 2021, the total fund size reached
System, since 2013, the state has given a contribution of 25 178.2 billion TL including the state contribution in BES, where
TL for every 100 TL savings, which has made the system more the number of participants is approaching 7 million, and in OKS,
attractive and said: “2013 is a milestone in the growth of the where the number of participants exceeds 6.1 million, the fund
system. Since the establishment of BES in 2003, the number of size reached 14.8 billion TL including the state contribution.
new participants entering the system in the first ten-year period Among the 193 billion TL funds that the system has reached
has averaged about 310 thousand people per year, while with in total, the amount of government contributions has exceeded
the implementation of a 25% state contribution implemented 23.2 billion TL. The upper limit of the state contribution is 25
in 2013, this number has increased to about 1 million per year. percent of the annual amount of the gross minimum wage, and
This radical increase created by the state contribution continued the maximum state contribution that can be received in 2021
until 2017, when the OKS was implemented, reaching the num- is set at 10,732.50 TL. The amount of the state contribution is
ber of about 6.6 million participants.” paid to the participant’s account in the month following the date
on which the contribution payment is transferred in cash to the
According to the information provided by Benli: the system, accounts of the pension company. Of these amounts registered in
which offered tax incentives before 2013, had inclusivity of individual pension state contribution accounts, 15% are entitled
about 36%, targeting only payroll employees. With the 25% to if they stay in the system for at least 3 years, 35% if they
state contribution introduced in 2013, non-taxpayer non-payroll stay in the system for at least 6 years, 60% if they stay in the
participants such as small tradesmen, housewives, and students system for at least 10 years, 100% in cases of retirement, death
have also benefited from the system, and the inclusivity of the or disability.
BES has been increased to 85%.