7 April 2023
Amendment to the Regulation on Individual Pension System (“Amendment”) was published in the Official Gazette dated 28.03.2023 and numbered 32146. With the Amendment, the private pension participants are given the opportunity to use loans from banks by showing their pension savings as a back-up for their loan debts. The Amendment has been introduced to meet the increasing financing needs of private pension participants; so instead of using their pension savings for their financing needs, the participants will be able to obtain loan by using such savings as a back-up for their loan debts.
The participants will be able to obtain loan by using all or part of their savings as a back-up for their loan debts through the assignment of receivable. Yet, the relevant savings will continue to be valued by way of investment in separate funds. Upon the payment of the loan debt, the amount of savings directed to investment will be converted into cash and distributed in line with the existing fund distribution preferences of the participant, and the pension contract will be continued. However, in case the loan debt is not paid within 30 (thirty) days after it becomes due and payable, the bank will be able to request to collect the remaining debt from the back-up amount. In such case, the savings will be converted into cash by way of terminating the pension contract and the relevant debt amount will be paid to the bank out of such cash.
The Regulation will enter into force six months after being published in the Official Gazette.
Guner Law Office