Pursuant to the new law, every Turkish worker under the age of 45 will be automatically enrolled in a personal pension plan through deductions from their salaries.
The AKP government, after introducing several new laws during the state of emergency, enacted a new law for promotion of the individual pension system (BES, Bireysel Emeklilik Sistemi). The new law was enacted on 10th of August 2016 and went in effect on 24th.
The system, called ‘mandatory BES’ when initially brought to agenda, has now transformed into ‘automatic BES’. The government has been carrying out a PR campaign for this new system, which will be implemented starting from the 1st of January 2017.
The new system, aiming to create funds for the capitalists and the Turkish economy in difficulty, is the first step towards privatization of the national pension system. The government wants to promote this system and transform it into an alternative to the national pension system.
PENSION SYSTEM AND TURKISH SOVEREIGN WEALTH FUND
The alleged targets of the new regulation are increasing total savings of workers and preventing their pension benefits to fall behind their pre-retirement income level. The new law, behind a semblance of paying attention to the workers’ interests, aims to create and transfer new funds to the capitalists. Deductions will be the most important financial source of the Turkish Sovereign Wealth Fund, which was enacted by a law that passed on 26th of August.
The new law establishes the Turkish Sovereign Wealth Fund (Türkiye Varlık Fonu) and the Turkish Sovereign Wealth Fund Management Joint Stock Company (Türkiye Varlık Fonu Yönetimi Anonim Şirketi), the asset management company of the fund.
INDIVIDUAL PENSION SYSTEM: AN IMF & WB INVENTION
It is well known that individual pension systems were promoted by the IMF and the World Bank, in accordance with the neoliberal policy prescriptions. The aim of the system is to erode public pension systems and provide funds for private investors.
