Istanbul Gelisim University - “Private Pension System average savings per capita is 22 thousand TL”

“Private Pension System average savings per capita is 22 thousand TL”

Stating that the total savings in the Private Pension System (BES) as of August 2021 is 152 billion TL, Capital Markets and Finance Specialist Dr. Bülent İlhan indicates that the number of participants is approximately 6.9 million people. Pointing out that the average savings per capita is 22 thousand TL, İlhan says, “Turkey is one of the countries with the strongest incentives in the private pension system among OECD countries. Despite this, the point reached in 18 years is far behind what it should be.”

“TURKEY APPLIES THE STRONGEST INCENTIVES”

“The ratio of individual pension savings to national income in OECD countries is 49.5% on average, it is 2.5% in our country,” says Asst. Prof. Bülent İlhan and adds, “Of the OECD countries, Turkey is one of the countries with the strongest incentives in the private pension system. Despite this, the point reached in 18 years is far behind what it should be.”

“CAUSES IMPATIBILITY”

Listing the reasons specific to Turkey for not preferring PPS savings, İlhan says, “The lack or limited savings opportunities of low-income individuals are among the reasons. Gold, foreign currency, deposits, etc. are more preferred by the savers. The fact that the retirement condition in the system requires a long term such as age 56 (and staying in the system for at least 10 years) and this causes impatience in individuals is also a factor in the preference.”

“QUITTING THE SYSTEM TO BUY A HOME OR CAR”

İlhan considers that some of the sales specialists’ giving incorrect or insufficient information is one of the reasons and emphasizes, “It is necessary to increase the level of awareness about the advantages of the system. Due to reasons such as credit card debt, buying a house or a car, the system is quitted early”.

“THE SYSTEM HAS A SUPERVISION MECHANISM”

Stating that the private pension system has a strong control and surveillance mechanism, from Istanbul Gelisim University (IGU) Department of Economics and Finance Asst. Prof. Bülent İlhan concludes his words as follows:

“Pension companies are organizations with a strong capital structure, established with the permission of the Ministry of Treasury and Finance, and audited by the ministry every year. In addition, these companies are companies subject to EGM (Retirement Monitoring Center) and independent and actuarial audit. Portfolio management companies and funds that manage the funds are also subject to CMB (Capital Markets Board) audit and independent audit. It consists of experienced experts with the necessary CMB licenses of portfolio managers. In addition, the fund shares of the participants are kept by Takasbank Inc.”.