Insurance and Private Pension Regulation and Supervision Agency
Legislative arrangements and system development studies regarding AES are carried out by Insurance and Private Pension Regulation and Supervision Agency (IPRSA). The companies that will operate in the system are licensed by the said Authority. The institution oversees the activities of pension companies and Pension Monitoring Center.
Formed pursuant to Individual Pension Savings and Investment System Law No. 4632, this Board sets AES-related policies and gives recommendations on measures to be taken for the implementation of these policies and on legislative regulations.
Pension Monitoring Center
Pension Monitoring Center was established for the following purposes pursuant to Law No. 4632 and relevant legislation upon the authorization and commissioning of the Undersecretariat of the Treasury:
- Ensure the safe and effective operation of the individual pension system,
- Oversee the operations of pension companies and individual pension intermediaries to protect participants' rights and interests,
- Build a monitoring and supervision system and report results to public authorities,
- Maintain and consolidate electronic data on individual pension accounts; pension plans; participants and contracts,
- Provide information to the public and participants,
- Produce statistics,
- Perform individual pension intermediaries' registry and exam transactions,
- Fulfill other duties regarding life insurance and other insurance branches
The Capital Markets Board of Turkey
The Capital Markets Board introduces regulations on the contracts between pension mutual funds, portfolio management companies and pension companies and monitors their operations and any unusual changes in price or amount of pension mutual funds.
Istanbul Settlement and Custody Bank Inc
It oversees the purchase-sale and clearance of pension mutual funds, keeps fund shares for each participant, and allows fund-based monitoring of contribution amounts in the fund accounts to be invested and the number of corresponding shares.
Ensure that contributions collected as part of the automatic participation system are invested, that participants can access their automatic participation accounts and all other account information (website, call center, email, petition, etc.) daily, and conduct internal audits of both the pension company and the funds so that the system operates according to the relevant legislation. Once an employee earns and uses the right of retirement, the company provides the following:
Lump-sum payment of part or all of the accumulation,
Payment of the accumulation in part according to a set reimbursement plan,
Or, if transfer of accumulation is requested into the annuity, completion of the transfer and putting the participant into a regular payment plan
Portfolio Management Company
It manages pension mutual funds as a proxy pursuant to the portfolio management contract with operating license from the Capital Markets Board of Turkey. The Capital Markets Board of Turkey obtains the operating license.
The AES shall apply to Turkish citizens or Blue Card holders who have not turned age 45 and who fall within the scope of articles 4a and 4c of the Social Insurance and General Health Insurance Law No. 5510 and that participate in the funds established as per supplementary article 20 of the Social Security Law No. 506. In other words, active insureds that are described as SSI and Retirement Fund members.
Employers enter employees in the AES by drawing up a contract with the pension company as per the relevant law's provisions and transfer the contributions into the pension company by deducting them from the employee’s salary.
Public officials that calculate the salaries and automatic contribution amounts of the employees in the AES, and make sure that the contributions are transferred to the pension company through bookkeeping. Employees can obtain information from such persons on the deduction made on their salaries as part of the automatic participation.
They act as an intermediary on behalf of the pension company for the pension contracts that pension companies offer to participants or sponsoring organization.
Social Security Institution
It is responsible to provide the Pension Monitoring Center (PMC) with information as part of the PMC's operations to identify the employers to be included in the AES and to monitor the contribution payments.
Ministry of Finance, Directorate General of Public Accounts
It provides the PMC with information about the public officials' contribution payments with regard to the institutions and organizations that are subject to the Law No. 5018.
The Ministry of Labor and Social Security
It checks whether public and private sector employers are fulfilling their liabilities pursuant to the AES, and implements administrative fines to those failing to do so.