Turkish pension assets

ANKARA – Revenues from the sale of hotels owned by the Turkish civil service pension fund will help cut the country’s social security deficit, an economic official has said. A growing social security deficit has led to budget spending in excess of targets for 2005, the official who spoke on condition of anonymity told Reuters. «But we see some rise in the revenues of social security institutions,» he said. The civil service pension fund will receive the revenues generated from the sale of its Istanbul Hilton Hotel and this will help slash the deficit, said the official. Media mogul Aydin Dogan offered a highest bid of $255.5 million for the Istanbul Hilton during final bargaining talks on August 11. The High Board of Privatization (OYK) has yet to approve the hotel’s sale. The Privatization Administration (OIB) has scheduled two other hotels owned by the pension fund in Ankara and Izmir. The transfer of revenues to the pension fund will help the overall state budget, the official said. «The revenues from the privatization will curb the transfers to the pension fund from the budget by the same amount,» he said. Official data show money spent for covering the social security deficit surged 23 percent year on year in the first seven months of 2005 to 13.518 billion lira ($10.16 billion). This corresponds to 61.4 percent of the total 21.999 billion lira allocated from the budget for the social security deficit. The pension fund alone received 5.295 billion lira from the budget for the January-July period, out of a total 8.889 billion lira it is entitled to receive for the whole year. Turkey’s pension deficit does not stem from an aging population as in some other countries, but is widely attributed to mismanagement and past early retirements. The IMF has urged Turkey to curb the deficit. A bill to raise the retirement age gradually as part of a long-term plan has been submitted to Parliament, due to reconvene in October.