Gov't contributed half billion TL to private pension funds

The government pledged last April to add 25 percent more support to each payment made on every pension account.

Gov't contributed half billion TL to private pension funds

World Bulletin / News Desk

The government has contributed more than TL 500 million as a support for private pension funds in the first five months of this year. Deputy Prime Minister Ali Babacan said in response to a question by main opposition Republican People's Party (CHP) Kırıkkale deputy Turgut Dibek that 3,702,941 people participated in the individual retirement opportunity by July 5 of this year.

The government pledged last April to add 25 percent more support to each payment made on every pension account.

With the new incentives, the government expects to encourage more citizens to increase their savings. The government is to estimate the contribution of individuals to their private pension plans -- know as Bireysel Emeklilik Sistemi (BES) -- and match 25 percent of the total payments made by each person. In other words, the state will add an extra TL 25 to every TL 100 deposited in the system, creating additional savings for citizens. This action is expected to promote savings among people in order to provide sustainable long-term growth for the economy.

The BES also allows customers to take an income tax deduction on the funds they personally contribute to the system. Contributions are deducted from monthly income tax by up to 10 percent of the gross monthly salary.

Babacan said in a letter to the CHP deputy that the government paid TL 41.7 million for payments made by individuals in January, TL 215.9 million for payments in February and March, TL 129.3 million in April and TL 121.8 million for payments in May.

Babacan added in his letter that the payments made by individuals cannot be used for any other purpose, recalling a relevant law that prohibits the state from transferring private pension funds to other branches of government.

Babacan said at least TL 508.7 million was paid as a contribution to private pension funds in the first five months of this year.

Last Mod: 11 Eylül 2013, 22:39
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