Legal AlertThe Regulation Amending the Regulation on the Private Pension System Has Been Published in the Official Gazette.

11 April 2023

The Regulation Amending the Regulation on Private Pension System (“Amending Regulation”) has been published in the Official Gazette dated 28.03.2023 and numbered 32146.

The Amending Regulation amended the Regulation on Private Pension System (“Regulation”) published in the Official Gazette on 01.12.2021.

With the Amending Regulation, an addition has been made to Article 10, which stipulates that the distribution ratios or amounts of the savings in the private pension account and the paid contributions among the funds can be changed a maximum of twelve times in a year. With this addition, the real persons in whose name and account a private pension account is opened with the company in accordance with the pension contract (“Participant“), will be able to choose a maximum of twenty funds in each fund distribution change, including the funds offered through the Private Pension Fund Trading Platform (BEFAS).

The most important change introduced by the Amending Regulation is the addition of Article 26/C. According to this article titled “Transfer of Receivables”, the Participant will be able to transfer all or part of its receivables – excluding the state contribution arising from private pension contracts – to banks through a transfer of receivables agreement; except for agreements subject to injunction, attachment, bankruptcy, pledge and all kinds of similar administrative and judicial claims regarding fund shares.

However, it is noted that the contracts transferred under this article cannot be transferred to other banks or companies before the existing transfer of receivables agreement is terminated. According to the new article, the existing receivables transfer agreement will be terminated after the bank notifies the company through the Pension Monitoring Centre that the amount subject to this agreement has been collected or the related loan debt has been closed (“Notification”).

The amount to be transferred is obtained by converting all savings and fund distribution in the participant’s account on the day the cash return instruction is given into cash in proportion to his/her share in the savings. The amount to be transferred will be invested in the funds determined by the Insurance and Private Pension Regulation and Supervision Board (“Board”) and the participant will not be able to make transactions regarding these fund shares.

Within two business days following the Notification, the savings amount invested in the funds is converted into cash and distributed in accordance with the participant’s current fund distribution preferences.

With this article, banks are given the opportunity to make a request to the Participant to collect the remaining debt from the transferred receivable thirty days after the loan debt becomes due and payable. In case of approval, the pension contract will be terminated, and the relevant debt will be deducted from the cash amount to be paid to the Participant and will be paid to the bank. It is stated that employer group pension contracts cannot be transferred.

In addition, it is underlined that the Participant’s right to fund distribution change shall not be deemed to have been used for the fund distribution changes brought by the regulations herein.

Finally, the procedures and principles regarding the content of the transfer of receivables agreement will be determined by the Insurance and Private Pension Regulatory and Supervisory Authority.

Amending Regulation shall enter into force 6 months after the date of its publication.

You can access the full Turkish text of the Amending Regulation from the link below.