Page 13 - Turkinsurance Digital Magazine

13

In 2023, we are aiming for rapid growth

Deniz Yurtseven, General Manager of MetLife Türkiye, stated, “As MetLife Türkiye,
our goal is always to enable our customers to manage their retirement and

insurance processes more easily and user-friendly.”

“In Turkey, we have one of the most
How do you evaluate the growth/developments and the cur-
rent status of the individual pension system as MetLife? generous structures in the world with
a 30% government contribution in the
The Individual Pension System (BES) continues to grow and
progress towards its target of a 1 trillion lira fund size, thanks Private Pension System (BES)”
to regulations and incentives that have increased the number of
participants and the size of the funds. Today, BES has contrib- In the existing retirement system in Turkey, the employer's con-
uted significantly to the capital markets, as domestic savings tribution is only available in the third tier, which is "voluntary
have increased, and retirement funds have reached a substantial individual retirement.” Through "employer-sponsored group
size. retirement plans," employees have the opportunity to increase
their savings for the future with contributions paid by their em-
The year 2022, in which we achieved significant growth in the ployers. Furthermore, such an additional benefit provided by the
sector, has already taken its place in history as a successful year employer increases the employee's loyalty to the company. Im-
for MetLife Türkiye. As of May 26, 2023, MetLife Türkiye has plementing a similar practice in the second tier, the Automatic
continued to grow, reaching a fund size of approximately 6.2 Enrollment System, and transitioning to a structure supported
billion TL with 232,000 participants, including government by employer contributions would be beneficial. Particularly due
contributions. We believe that BES, with a fund size approach- to the recent increase in the minimum gross wage, there may
ing 450 billion TL, will continue to be prominent in the new era. be some reluctance to this issue. However, if the pressure on
employers regarding the minimum gross wage is reduced, em-
What can we do better compared to the rest of the world, ployers may approach this issue more positively.
and what are the obstacles in front of BES?
Additionally, ensuring the transfer of employer contributions
The Individual Pension System is used as a savings method from the Unemployment Fund or severance pay to automatic
worldwide. The savings directed towards investments contribute enrollment funds would contribute to the growth of the sector.
to increased production, employment, and become an important
source supporting stable economic growth. On the other hand, integrating the Automatic Enrollment Sys-
tem between the General Directorate of Security (EGM) and the
The goal of retirement systems is to provide individuals who can Social Security Institution (SGK) and including employees who
save with financial security for their future through regular in- need to be included in the system by employers, as well as track-
vestments supported by professional fund management. The re- ing the deducted contributions from employees and transferring
tirement system consists of three tiers: In Turkey, we have the them to the funds, would facilitate the growth of the second-tier
third tier where individuals voluntarily invest in the individual Automatic Enrollment System. Furthermore, increasing the
pension system. Additionally, there is the automatic enrollment variety of funds offered in the Automatic Contribution System
system, implemented as the second tier, where employers deduct (OKS) can make the system more attractive to participants.
contributions from employees' salaries on their behalf. The first
tier refers to the mandatory public social security system. In general, when evaluating the BES system, we see that making
choices suitable for the long-term structure of the system signif-
In the retirement system, the funding of guarantees for the re- icantly enhances participants' savings while protecting them. In
tirement period is provided by the accumulation of contributions a system where funds suitable for all risk profiles are available,
made by workers through small savings or contributions made short-term investment preferences may be affected by economic
on their behalf. This can be based on compulsory or voluntary fluctuations in certain periods. However, significant gains can
participation, with employer or individual contributions. be achieved through long-term funds. Turkey is also one of the