What is a Pension
Fund?
Pension Funds are established to manage a portfolio of funds collected from the public under the principle of distribution of risk and ownership. Such a fund does not have any legal identity. These funds shall not be used for any purpose other than that are clearly stated at Retail Pension, Capital Market Law, pension contract, internal regulations of the funds and other regulations. The assets of such funds may not be pledged or provided as guarantee and may not be seized by third parties.
- Retail Pension Funds are funds mainly targeting the contributions of the employee and/or employer who save some part of their income when they at working ages aiming to compensate revenue loss at their retirement.
- Employees periodically invest 5%-10% of their incomes in one or more pension funds at their working ages. By this way, they can finance their future expenditures of the retirement period.
- These funds operate under the contract of the pension.
Retirement company can establish a fund by signing a portfolio management
agreement with at least one asset management company. Those companies have to establish at least three funds to satisfy all kinds of participants needs who have different risk/reward expectations. It is also possible to set up more than three funds to be able to serve more alternatives for participants.
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