Turkish private pension assets reach 2.8 bln euros
Posted by meb at July 26th, 2008
The assets of Turkey’s 10 private pension insurance companies reached YTL 5.28 billion in mid-July, the latest data from the Pension Monitoring Center, or EGM, showed. The private pensions system, launched in March 2003, has some 1.63 million participants today.
The leading firm in terms of assets is Avivasa, with a portfolio of YTL 1.23 billion (654 million euros). Avivasa is a merger of United Kingdom-based insurance giant Aviva, and Turkey’s AK Emeklilik, a subsidiary of the Sabancı Group. The second largest firm in terms of assets is Anadolu Hayat Emeklilik with a portfolio of YTL 1.06 billion (567 million euros).
Growth to continue
The rapid growth of the number of participants, which increased from 1.46 million in January to 1.63 in July, indicates the strong growth potential of the sector. Also the asset volume of the 10 pension insurance firms, which increased from YTL 4.58 billion to the current YTL 5.28 billion, supports the trend.
Giray Velioğlu, chief executive officer of 422-million euro Yapı Kredi Pension, forecast earlier this year that the sector will have 1.8 million participants and an asset volume of YTL 7 billion (3.7 billion euros) by the end of this year. “By its 10th anniversary in 2013 the system is likely to have reached 8-9 million participants and an asset volume of $15 billion,” he said.
Second pillar growth
Although the sector has experienced notable growth since its inception – approximately 133 percent a year – it is still largely composed of individual plans. Individual plans make up about 75 percent of all contracts and group plans only 25 percent.
However, new legislation, which introduced vesting rights this spring, is expected to boost the corporate sector and offer notable opportunities for foreign players to enter the sector too. “Vesting rights were, in fact something we, and the whole industry, were waiting for four years. It will lead to a notable growth of group plans in future,” said Erhan Adalı, president and chief executive officer of Garanti Pension. At present Garanti, which manages some 380 million euros, provides about one-fourth of all 449,400 group pension plans in Turkey.
source: Turkish Daily News
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