Participation in private pension system on the rise

Published 14.07.2014 00:55

Funds invested in the state-supported private pension system have reached TL 30 billion, with 4.6 million people currently registered, an increase of 26 percent in a year. State support for the system has increased to TL 2.8 billion.

The funds invested into the Private Pension System (BES), which has been established to complement the social security system in Turkey, has reached TL 30 billion. BES, which ensures that the welfare levels of pensioners do not suffer and which also supports the economy since it increases long-term savings in the country, has reached various targets in its 11th year. According to data published on the website of the Pension Monitoring Center dated June 27, 2014, BES' number of customers has reached 4.6 million, increasing by 26 percent when compared to last year. Within the first six months of this year, 471,762 people joined BES, depositing TL29.5 billion. When compared to last year, the funds deposited to the system have increased by 29 percent.

The state contribution to the system, which is promoted by the Deputy Prime Minister Ali Babacan, has reached TL 2.8 billion, thus increasing by 333 percent when compared to last year's figures. Istanbul, with 29.9 percent, has become the city that with the highest level of BES participants, followed by Ankara and İzmir. While the middle-aged participants are the highest portion, there is still relatively low participation in individuals aged under 25 and over 56. While participants under 25 make up around 6.39 percent, participants between 25 and 34 are around 40 percent, participants between 35 and 44 are 33.86 percent and participants between 45 and 55 are around 20.25 percent. When contracts and certificates are classified according to currency, the funds deposited in Turkish lira are around 98.58 percent, while U.S. dollars account for around 1.26 percent and the euro is around 0.16 percent. Economists view the rise as a positive sign for the Turkish economy, since saving rate is quite low in Turkey when compared to other emerging countries, which forces Turkey to take loans to cover its current account deficit.

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