TURKEY - Ray Sigorta, a pensions joint venture from Vienna Insurance Group and Dogan Holding in Turkey, is planning to enter the local private pension funds sector by June 2009, while two others firms are understood to looking at entering too.

Nuzhet Atabek, general manager of Ray Sigorta, said the firm will apply for permission from the Turkish Treasury over the coming months to deliver private pension funds to the Turkish market.

"We decided to apply for permission to launch private pension funds because there is notable growth potential in private pension funds in Turkey, where pension insurance is growing faster than any other insurance sector," Atabek said.

"We still have plenty of homework to do before we can file in our application. But if we eventually receive the permission, we will launch our pensions operation around May or June 2009," he added.

New laws and regulations were introduced this year to encourage more retail and institutional investors to invest in private pension funds, Atabek noted.

Turkey introduced vesting rights in its pension legislation in April - a move which is forecast to lead to a growth in insurance-driven corporate pension plans as this sector currently provides just 25% of all contracts.

A new regulation allowing companies' pension foundations to transfer their assets into private pension funds also came into force in August, which is designed to increase asset volume in the country's 10 pension companies.

And a new social security package came into force in October which will gradually raise the retirement age from the current 58 years for women and 60 years for men to reach 65 years for both.

"We expect all these new developments to boost the private pensions market in the coming years. This growth potential means there are several other new players who are considering entering the market," Atabek added.

The two other firms are expected to be Finans Emeklilik, owned by the National Bank of Greece, and Ergo Isvicre, the local subsidiary of German Ergo International Group.

The Turkish private pension system, which was created in October 2003, currently consists of 10 companies with 1.7 million members and total assets of €2.66bn invested in 110 mutual funds.

According to Turkey's Capital Markets Board, the funds' portfolios were in September invested in government fixed income (69%), reverse repo transactions (17.5%), equities (7.5%,) foreign fixed income (0.5%) and other instruments (5.5%).

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