An Evaluation of the Interest-Free Pension System Implemented in Turkey in Terms of Islamic Law
Necmeddin Güney, Yusuf Erdem GezginThe private pension system (PPS) in Türkiye is based on the long-term investment of savings individuals make throughout their work life and results in the payment of a lump sum or salary to the person upon retirement. This private pension system was launched 19 years ago and consists of the voluntary-based individual pension system (Volunteer PPS) and the obligation-based automatic enrollment system (AES). People participating in PSS can choose the funds in which they want their money to be invested. Two types of pension plans exist in terms of Shariah compliance: conventional and interest-free. While all pension management companies have interest-free pension funds (usually from AES) in addition to conventional funds, two pension companies provide interest-free-only pension plans and fund services. This study aims to evaluate the current application of interest-free PPS in Türkiye within the framework of Islamic law. After introducing information about the development process and current status of PPS practices in Türkiye, the article will go on to explain the Islamic ruling on interest-free PPS pension plans according to Islamic law and point out the possible objectionable issues.
Ülkemizde Uygulanan Faizsiz Bireysel Emeklilik Sisteminin İslam Hukuku Açısından Değerlendirilmesi
Necmeddin Güney, Yusuf Erdem GezginBireysel Emeklilik Sistemi (BES) ülkemizde sigortacılık sektörünün hayat ve emeklilik branşının önemli bir unsurudur. BES, kişilerin çalıştıkları dönemde yaptıkları tasarruflarının uzun vadeli olarak değerlendirilmesi ve süreç sonunda kişiye toplu para ödenmesi esasına dayanır. Ülkemizde henüz 18 yıllık bir geçmişi bulunan bu sistem, çalışanlara, sermaye piyasasına, sigorta sektörüne ve bir bütün olarak ülke ekonomisine çeşitli açılardan fayda sağlamaktadır. BES, gönüllülük esaslı Bireysel Emeklilik Sistemi (Gönüllü BES) ve zorunluluk esaslı Otomatik Katılım Sistemi (OKS) seçeneklerinden oluşmaktadır. BES’e katılan kişiler istediği fonu seçerek yatırımlarını dilediği gibi yönlendirebilmektedir. Kişinin sistemdeki toplam birikim tutarı, aylık tasarruf miktarına, seçtiği fonların getirisine ve teşvik amaçlı devlet katkısına ve devlet katkısının getirisine göre değişmektedir. BES emeklilik yatırım fonları faizli ve faizsiz olmak üzere ikiye ayrılmıştır. Bireysel emeklilik şirketlerinin OKS kapsamında sisteme dahil olan şirketlere faizsiz fon seçeneğini sunması zorunlu tutulmuştur. OKS’de katılımcıların yarıdan fazlasının faizsiz emeklilik plan ve fonlarını tercih etmiş olması dikkat çekmektedir. Ancak Gönüllü BES’in fonları çok daha büyük olduğundan, sistemdeki toplam paranın %16 kadarı faizsiz fonlardadır. Bu çalışmanın amacı faizsiz BES’in Türkiye’deki mevcut uygulamasının İslam hukukunun belirlediği kurallar açısından değerlendirilmesidir. Girişte Bireysel Emeklilik Sisteminin ve faizsiz BES seçeneğinin ülkemizdeki mevcut durumu ve gelişim süreci hakkında bilgi verilecektir. Ardından faizsiz (katılım) BES uygulamasının mevzuatı, faizsiz emeklilik planları ve emeklilik yatırım fonları, devlet katkısı, emeklilik şirketi ve portföy yönetim şirketleriyle ilişkiler ve danışma komitesinin görevi gibi konuların fıkhi boyutuna değinilecektir. Netice olarak faizsiz (katılım) BES emeklilik planlarının fıkhi hükmü ortaya konularak dikkat edilmesi gereken sakıncalı hususlara işaret edilecektir.
The private pension system (PPS) in Türkiye is a savings and investment system that operates according to certain rules to ensure that individuals have access to a collective savings that will help them to be comfortable in their later years. In addition to being a source of savings for individuals, PPS contributes to employment and development by providing resources to the economy.
As a complement to the social security system, PPS is run by private pension companies under the supervision and control of the state. The amount of savings that individuals will have access to during retirement varies according to the total contributions they’ve paid to the system, their fund preferences, the returns from these funds, and any additional amounts contributed by the state for incentive purposes.
PPS is an important element of the life and pension branch of Türkiye’s insurance sector. PPS was enacted through the Private Pension Savings and Investment System Law No. 4632 published in 2001 and started its operations in 2003 with the establishment of pension companies and the approval of the first pension plans.
In more than 19 years, the private pension system in Türkiye has reached 13 million participants and a fund size of over 380 billion Turkish Lira (TL). This fund size corresponds to around 5% of Türkiye’s GDP. When considering that the average percentage of fund size to GDP is much higher in OECD countries, PPS can be said to have the potential to grow further in the coming years.
More than half of the participants in the obligation-based automatic enrollment system (AES) noteworthily prefer interest-free pension plans and funds. However, because the funds of the earlier established Volunteer PPS are much larger, interest-free (i.e., participation-based) PPS funds account for 16% of the total size of pension mutual funds.
In terms of fiqh principles, the essence and goals of the PPS system can be said to be in line with Islamic principles. However, some points exist that need to be considered in order for the current PPS implementation to be fully legitimate and halal in Islamic terms.
The PPS’s most crucial requirement in terms of Shariah compliance is that all savings must be put fully in halal investments. This is because, despite being referred to as a pension, the system in essence consists of the withdrawal of savings that had been made and invested in various fields in the past. The savings transferred to pension investment funds must be invested in halal funds. For this purpose, special interest-free pension investment funds have been established. The mandatory Shariah advisory committee and other practices introduced in 2021 for interest-free pension plans and funds are expected to supervise and guarantee the sector’s compliance with Islamic principles beyond a mere claim.
However, the investment options of interest-free pension funds should be emphasized as being more limited compared to interest-based funds and require development. As many researchers have stated, the need exists for further studies on Shariah compliance regarding these investment instruments, especially with regard to lease certificates (sukūk) and the development of new products and investment areas to increase the investment diversity of halal funds.
As long as a public benefit occurs, no harm exists in terms of fiqh when utilizing state-offered incentives. Therefore, having the state provide various tax reductions/exemptions or contribute to the PPS savings of participants who meet certain conditions is a legitimate method for encouraging the PPS system for the public good.
Upon retirement, those who’ve earned the right to do so can either withdraw their savings completely or continue to invest them in halal areas. The third option PPS offers involves an annuity contract, but this is not permitted from the perspective of Shariah compliance.
