There’s A Big Shake Up Coming to Turkey’s Pension Industry
A looming shake up of Turkey’s pension savings industry that the government says is aimed at increasing competition and improving returns has some money managers fretting the steps will backfire as reduced fees erode service levels.
Starting Jan. 1, Turkey’s 50 asset managers, which are permitted to oversee 100 percent of any pension fund company’s portfolio, will see that proportion slashed to 40 percent. Allianz AG and Aviva Plc are among 18 private pension companies who as of Nov. 3 entrusted about 75 billion liras ($19.3 billion) to money managers, up from 61 billion liras at the end of 2016, according to figures from the government’s Pension Monitoring Center.
Deputy Prime Minister Mehmet Simsek is among the sternest critics of the managers. “Artificial intelligence, I mean a robot, would have generated better returns than most of the asset management companies,” Dunya newspaper cited him as saying in April. The government, which matches 25 percent of personal contributions to individual pensions, wants to encourage competition and innovation, he has said.
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