On October 07, 2001 the law no. 4632 on Individual Pension Savings and Investment System, which is complementary to the state social security system on the basis of voluntary participation and the defined contribution principle, with a view to direct individual pension savings to investment to improve the welfare level by providing a supplementary income during retirement to contribute to economic development by creating long term resources for the economy and thereby increase employment, came into force. After the law and some other legislation that strengths the base of the system, Turkish Individual Pension System commenced on October 27, 2003 with the contribution of six pension companies. At present there are nineteen pension companies in the system.
As a requirement of the law no. 4632, Prime Ministry Undersecretariat of Treasury authorized the ‘Pension Monitoring Center’ (In Turkish ‘Emeklilik Gözetim Merkezi’ or in short EGM) in order to ensure that the Individual Pension System operates in a safe and efficient manner, and rights and interests of participants are protected. With the amendments made by another law, on June 14, 2007, the definition of the functions and tasks of EGM were added to the law no. 4632. As an e-governance application, EGM is established to produce accurate information on behalf of Turkish Treasury for daily electronic monitoring of the companies operating in the system. The establishment was completed by the shareholders with ca.1.7 million USD paid-in capitals on July 10, 2003. One of the shareholders is Prime Ministry Undersecretariat of Treasury with a privileged share in capital, other shareholders are 18 pension companies (Aegon Emeklilik & Hayat, Allianz Hayat & Emeklilik, Allianz Yaşam & Emeklilik, Anadolu Hayat Emeklilik, Asya Emeklilik & Hayat, Avivasa Emeklilik & Hayat, Axa Hayat & Emeklilik, BNP Paribas Cardif Emeklilik, Cigna Finans Emeklilik & Hayat, Metlife Emeklilik & Hayat, Fiba Emeklilik & Hayat, Garanti Emeklilik & Hayat, Groupama Emeklilik, Halk Hayat & Emeklilik, NN Hayat ve Emeklilik, Katılım Emeklilik & Hayat, Vakıf Emeklilik, Ziraat Hayat & Emeklilik) which have licenses to operate in the pension branch with equal share in capital.
EGM, which is a control mechanism, mainly assigned to perform the following tasks;
- Daily electronic monitoring & surveillance of pension company’s activities and e-reporting to the authorities,
- Storing standardized data for all individual accounts,
- Consolidation of data, based on the daily transactions of the pensions companies,
- Providing information to public and participants,
- Generating statistical & actuarial information,
- Providing analysis & reports,
- Implementing the licensing exam of Intermediaries & keeping track of the electronic registries,
- Meeting the demand for joint presentation, training activities, software & allied subjects,
- Organizing data for timely intervention to possible problems,
- Managing complaints from the participants,
- Coordinating projects with international associations to enhance the system, giving support to pension companies,
- Analytically querying the system,
- Calculation of the state contribution utilizing the data sent by the pension companies, to allocate the subsidy paid by the Undersecretariat among the pension companies to be transferred to the individual pension accounts.
- Performing the other tasks determined by Prime Ministry Undersecretariat of Treasury that are related to the life insurance and the other branches of insurance.
As of February 22, 2004, EGM (Pension Monitoring Center) has been registered as a governing member of the International Organisation of Pension Supervisors (IOPS), the standard-setting body on pension supervisory issues and regulating issues related to pension supervision through the development and promotion of the implementation of international principles, standards, and good practices in pension supervision, with regard to the variety of different private pension systems.
You can download Individual Pension System 2015 Progress Report which gives detailed statistics on contracts, participants, contributions, intermediaries and pension mutual funds; includes information on latest developments in the relevant legal framework in Turkey.
You can download The Basic Indicators of Private Pension System of Turkey. ( 2004, 2005, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016
Glossary of pensions, mutual funds-pension mutual funds.