MILITARY PERSONNEL ASSISTANCE [AND PENSION] FUND LAW

 

Law No.   205
Date Enacted 3/1/1961
Date Published 9/1/1961
Official Gazette 10702
Effective Date 1/3/1961

 

 

NOTE: This English translation is for convenience and is subject in all respects to the interpretation of the law as enacted in Turkish.

 

Establishment

Article l – An institution related to the Ministry of National Defense to be known as the Armed Forces Assistance [and Pension] Fund is hereby established to provide members of Turkish Armed Forces with mutual assistance set out in this Law. The headquarters of the Fund shall be in Ankara.

The Fund shall be subject to the provisions of this Law and private law and shall be a corporate body with financial and administrative autonomy.

Organs of the Fund

Article 2 – The organs of the Fund shall be as follows:

  1. The Representative Assembly
  2. The General Assembly
  3. The Board of Directors
  4. The Board of Audit
  5. The General Directorate

The Representative Assembly

Article 3 – The Representative Assembly shall be composed of representatives from units and establishments of the Turkish Armed Forces, designated by their respective commanders or superiors from among the permanent members as defined in Article 17 of this Law in those units. The number of representatives from each unit and establishment shall be determined by the Ministry of National Defense giving due consideration to the number of permanent mem- bers currently employed in such units and establishments.

The total number of members of the Representative Assembly shall be not less than 50 and not more than 100.

The principles and procedures for designating the members of the Representative Assembly shall be determined by a regulation which shall take into account the locations of units and establishments and the number of permanent members currently employed in them.

The initial Regulation shall be prepared by a Committee to be established in accordance with Transitional Article 5 of this Law and shall come into effect upon its approval by the Minister of National Defense. Subsequent amendments to the Regulation shall be made by the Ministry of National Defense with the advice of the Representative Assembly and the Board of Directors.

The Representative Assembly shall convene in Ankara once every three years at least three days prior to the regular annual meeting of the General Assembly.

The Ministry of National Defense and the General Assembly shall each have the right to request the Board of Directors to call an extraordinary session of the Representative Assembly. The agenda of the meeting of the Representative Assembly shall be determined by the Board of Directors and delivered to the members of the Representative Assembly at least fifteen days before the meeting date. The Ministry of National Defense may add items to the agenda of the Representative Assembly it deems necessary provided that it complies with the same time limit.

The Minister of National Defense, or, in his absence, the Chief of the General Staff, shall preside at meetings of the Representative Assembly.

The presence of at least half of its membership shall be required to convene a meeting of the Representative Assembly, and decisions may be adopted by a majority of the members present.

Travel allowances shall be provided by the Fund in accordance with the Travel Allowances Law to those members attending meetings of the Representative Assembly from outside Ankara.

The duties of the Representative Assembly shall be as follows:

  1. To elect by secret ballot from among its own members, proportionally, twenty (20) regular and ten (10) substitute members of the General Assembly, who shall represent the Representative Assembly for three regular sessions of the General Assembly.
  2. Every three years, to express its views about and comment on the balance sheets and profit and loss statements of the Fund, the activity reports of the Board of Directors, the resolutions of the General Assembly, and the reports of the Board of Audit, and to make recommendations about future activities of the Fund.
  3. To express its views on matters referred to it by the Ministry of National Defense, the General Assembly, or the Board of Directors;
  4. To propose amendments to the Regulation pertaining to the selection of members of the Representative Assembly;
  5. To express views on suggestions made by the Members with respect to the activities of the Fund, and to give instructions to members of the General Assembly with respect to such matters.

The General Assembly

Article 4 – In addition to the twenty (20) members of the General Assembly to be elected by the Representatives Assembly, the General Assembly shall be composed of the following members:

  • The Minister of National Defense,
  • The Minister of Finance,
  • The Chief of the General Staff,
  • The Commanders of the Land Forces, the Naval Forces, and the Air Forces, or their Chiefs of Staff.
  • The General Commander of the Gendarmerie or his Chief of Staff.
  • The President of the Court of Accounts of the Republic of Turkey,
  • The President of the Board of Audit of the Prime Ministry of the Republic of Tur- key,
  • The Chairman of the Board of the Banks Association of Turkey,
  • The Chairman of the Union Chambers and Commodity Exchanges of Turkey,
  • The following staff of the Ministry of National Defense or General Staff:
    1. The Chief of Personnel,
    2. The Chief of Logistics,
    3. The Comptroller,
    4. The Chief of Health Affairs,
    5. The Chief of Research and Development,
    6. The Director of Legal Affairs,
  • From the private sector, three persons distinguished in financial and economic fields, who will be appointed by the Minister of National Defense for three-year terms of office.

The General Assembly shall be presided over by the Minister of National Defense or, in his absence, by the Minister of Finance or, in the absence of both, by another individual present from the above list selected in the order listed.

The General Assembly shall hold a regular meeting upon call of the Board of Directors once every year no later than the end of May.

The Board of Directors or the Board of Audit may call the General Assembly to an extraordinary session whenever required.

The quorum required for a meeting of the General Assembly shall be the majority of its full membership. Decisions shall be taken by simple majority of the members present.

Travel allowances shall be provided by the Fund in accordance with the Travel Allowances Law to those members of the General Assembly attending from outside Ankara.

Article 5 – The duties of the General Assembly shall be as follows:

  1. To take decisions on the annual balance sheets and profit and loss statements and activity report of the Fund and the reports of the Board of Audit with respect to its audits of accounts and transactions (the approval of the balance sheet and activity report by the General Assembly shall constitute the release of the responsible persons);
  2. To elect from among the candidates nominated in accordance with the provisions of Article 8 below those members of the Board of Directors whose election has been entrusted to the General Assembly and to determine the meeting attendance fees to be paid to the Chairman and the members of the Board of Directors;
  3. To take decisions and to make comments or recommendations on matters related to the management of the assets of the Fund and on other subjects which shall have been referred to the General Assembly by the Board of Directors;
  4. To appoint an auditor and substitutes as provided in Article 6 below and to determine the fees to be paid to the auditors;
  5. To take decisions on matters referred to it by the Representative Assembly.

The Board of Audit

Article 6 – The Board of Audit shall be composed of three (3) members as follows:

  • One member shall be elected by the General Assembly from among five candidates nominated by the Minister of National Defense;
  • One member shall be selected by the President of the Board of Audit of the Prime Ministry of the Republic of Turkey;
  • One member shall be selected by the Chairman of the Board of the Banks Association of Turkey.

The General Assembly shall also elect two substitute auditors from among the candidates nominated by the Minister of National Defense.

The term of office of the Board of Audit shall be for three regular sessions of the General Assembly. Auditors whose terms of office have expired may be reelected.

If the seat on the Board of Audit of a member elected by the General Assembly shall become vacant, a substitute member starting with the person who received the highest number of votes by the General Assembly (in case of equality, lots shall be drawn) shall fill such vacant position until his predecessor’s term of office expires. If a seat on the Board of Audit of a member appointed by one of the other authorities above shall become vacant, the relevant such authority shall appoint a new member who shall fill such vacant position until his predecessor’s term of office expires.

Auditors appointed by the President of the Board of Audit of the Prime Ministry of the Republic of Turkey and the Chairman of the Board of the Banks Association of Turkey shall have a university degree and be specialized and experienced in the fields of finance, law, banking, insurance and accounting. The fees payable to the auditors shall be determined by the General Assembly.

The Board of Directors

Article 7 – The Board of Directors shall be composed of seven (7) members. The Chairman and the members of the Board of Directors shall be elected as provided in Article 8. The General Manager shall ex officio be a member of the Board of Directors and shall have the right to vote.

Article 8 – Two of three members of the Board of Directors to be elected from among the employees of the Turkish Armed Forces shall be elected by the General Assembly from among four candidates nominated by the Minister of National Defense and the third shall be elected by the General Assembly from among two candidates nominated by the Chief of the General Staff. Elections shall be by secret ballot.

The other four members shall be university graduates specialized and experienced in the fields of finance, law, banking or insurance selected by an Election Committee established solely for this purpose. The Election Committee shall be composed of the Minister of National Defense, the Minister of Finance, the President of the Court of Accounts of the Republic of Turkey, the President of the Board of General Audit of the Prime Ministry of the Republic of Turkey, the Chairman of the Union Chambers and Commodity Exchanges of Turkey, and the Chairman of the Board of the Banks Association of Turkey. This Committee shall also select the Chairman of the Board of Directors.

The term of office of the Chairman and the members of the Board of Directors shall be for three regular sessions of the General Assembly.

Members whose terms of office have expired may be renominated and reelected. Members whose terms of office have expired shall continue their duties until their successors as- sume their duties.

The General Assembly shall oversee the Board of Directors and may terminate its office when deemed necessary. For such a decision to be taken, however, the termination of office of the Board of Directors must be placed on the agenda of the General Assembly at least three days prior to a General Assembly meeting based on a proposal in writing of at least one fourth of the members of the General Assembly.

Should a vacancy occur among members of the Board of Directors elected by the General Assembly, the entity that nominated such member shall temporarily appoint a new member who shall fill such vacancy until the next General Assembly meeting, at which time the General Assembly shall elect a replacement in accordance with the first paragraph of this Article. A member who has been temporarily appointed to the Board may be nominated for election.

Should a vacancy occur among members selected by the Election Committee, the Election Committee shall select a replacement within one month of the occurrence of the vacancy.

Article 9 – The General Assembly shall determine the attendance fees to be paid to members of the Board of Directors for participating in board meetings.

Article 10 – The Board of Directors shall meet when required but in any event at least once every month.

In the absence of its Chairman, the members of the Board of Directors shall elect one of their members other than the General Manager to preside over such meeting.

The quorum for a meeting of the Board of Directors shall be five, and decisions shall be taken by a majority of those present.

Auditors, at their option, and all Deputy General Managers shall attend meetings of the Board of Directors as observers without a right to vote.

Article 11 – The duties of the Board of Directors shall be as follows:

  1. To administer the activities of the Fund on a continuous basis as managers of the Fund;
  2. To examine and approve budget and staffing proposals of the General Directorate;
  3. To review, and approve if they are proper, the annual balance sheets and profit and loss statements prepared by the General Directorate, and to present such to the General Assembly together with reports on activities of the Fund undertaken during the year and activities contemplated for subsequent years;
  4. To determine and decide on benefit amounts to be provided in accordance with this Law;
  5. To examine and present to the General Assembly the technical balance sheet and actuarial report prepared by the General Directorate every five years;
  6. To institute lawsuits, to initiate enforcement proceedings, to waive these rights when deemed beneficial, to resolve by arbitration claims brought by or against the Fund;
  7. To appoint the General Manager and his deputies, and to discharge them when required, and to appoint other officials and their staff upon the proposal of the General Directorate;
  8. To determine those authorized to sign in the name of the Fund, and to set limits on such authority; and to establish, duly register, publish and announce the signature circu- lar binding on the Fund;
  9. To determine the methods for managing the assets of the Fund, and to empower the General Directorate in connection with the transactions provided for in Article 33;
  10. To determine the amount of the credit fund upon the proposal of the General Directorate;
  11. To determine, upon proposal of the General Directorate, the wages, salaries, termination benefits, bonuses, and other allowances to be paid to officials and staff of the Fund, and to determine on its own the same with respect to the General Manager;
  12. To examine and approve internal operating policies and regulations of the Fund prepared by the General Directorate;
  13. To discharge all duties assigned to it by law and to implement decisions of the General Assembly;
  14. To deliver the annual balance sheets and profit and loss statements, activity report, and auditors' report to the members of the General Assembly not less than fifteen (15) days prior to the regular annual meetings of the General Assembly.

Article 12 – Members of the Board of Directors shall perform their duties for the Fund with the same attention, dedication and industriousness as are normally applied by any person in conducting his own business affairs, and they shall provide their comments, opinions, and proposals either directly to the Chairman or to the Board of Directors when it is in session. Members shall not directly instruct staff of the Fund concerning their duties.

The General Directorate

Article 13 – The Fund shall have a General Manager and such number of Deputy General Managers as may be necessary and sufficient. The General Manager and the Deputy General Managers shall have university degrees and shall be specialized and experienced in the fields of insurance, finance, economy, law, banking, and accounting.

Article 14 – The General Manager and the Deputy General Managers shall be appointed by the Board of Directors.

The salaries, wages, termination benefits, bonuses and other allowances to be paid to the General Manager and the Deputy General Managers shall be determined by the Board of Directors.

Article 15 – The General Manager shall carry out the affairs of the Fund in accordance with the provisions of this Law, other laws and regulations that are in effect, and the decisions of the Board of Directors. The General Manager is the representative of the Fund. The General Manager may fulfill the duty of representation himself or may delegate it to another person.

All papers, documents and contracts binding on the Fund shall be signed by two authorized signatories. Authorized signatories as well as the limits of their authorization shall be set forth in the signature circular adopted by the Board of Directors.

As set forth above, no members of the Board of Directors, except its Chairman, shall be authorized to sign documents binding upon the Fund.

Article 16 – The provisions of Law No: 1281 shall apply to the Officers and any other Military Personnel appointed to the Board of Directors, the Board of Audit, or other parts of the Fund or entities in which the Fund owns at least fifty percent of the capital. However, salaries and allowances of such personnel shall not be payable from the budget of the Ministry of National Defense.

Members of the Fund

Article 17 – The members of the Fund (permanent and temporary) shall be as follows:

  1. All regular officers, contract officers, military employees, non-commissioned officers, non-commissioned contract officers, and specialist gendarmes employed in the Turkish Armed Forces, all members participating in the pension system, and, in the case of the death of a member, the spouse of such member if such spouse has elected to participate in the pension system, are permanent members of the Fund.
  2. Specialist privates and all wage- and salary-earning personnel employed in the Ministry of National Defense, the Gendarmerie General Command, the Fund, or any entity in which the Fund owns at least fifty percent of the capital may elect to be permanent members of the Fund.
  3. Reserve officers in active military service shall be temporary members of the Fund.

Persons who transfer from temporary membership to permanent membership may have their period of temporary membership merged with their continuing period of permanent membership provided that they shall pay any difference in dues, including earnings thereon calculated in accordance with procedures determined by the Fund.

Revenues of the Fund

Article 18 –The sources of revenue of the Fund shall be as follows:

a. %10 shall be deducted for regular officers and non-commissioned officers, commissioned and non commissioned contract officers, specialist gendarmes and specialist privates; %10 shall be deducted for civil servants and contracted personnel employed in the Turkish General Staff, Ministry of Defense, Land Forces, the Naval Forces, and the Air Forces Commands, Gendarmerie General Command and Coast Guard Com- mand and %5 shall be deducted for reserve officers, from the “assessment base”, calculated by adding,

  1. %240, for whom that have an additional indicator equal to 8400 or higher than 8400
  2. %200, for whom that have an additional indicator between 7600(included)-8400 (excluded).
  3. %180, for whom that have an additional indicator between 6400(included)-7600 (excluded).
  4. %150, for whom that have an additional indicator between 4800(included)- 6400(excluded).
  5. %130, for whom that have an additional indicator between 3600(included)-4800 (excluded).
  6. %70, for whom that have an additional indicator between 2200 (included)-3600 (excluded).
  7. %40, for the others,

of the highest gross salary amount (including additional indicator) of a civil servant who is subject to Law No. 657 to the total of the salary (including additional indicator), basic salary and monthly enhancements.

b. 10% shall be deducted from the salaries dependent on social security contributions of those who have chosen to be permanent members of the Fund who are employed in the Armed Forces Assistance Fund or in entities of which the Fund owns at least fifty percent of the capital;

c. Revenues generated from the management of the assets of the Fund;

d. All kinds of donations in cash or in kind made by real or legal entities;

e. Additional dues in the amount of 10% shall be deducted from the “assessment base” determined under subparagraphs (a) and (b) for permanent members listed in sub-paragraphs (a) and (b) who elect to participate in the Housing Savings Fund.

Deduction amount for military judges and prosecutors shall be determined according to the amount calculated, by taking into account the additional indicators determined under the Additional Indicators Scale No. (I) attached to the Law of Judges and Public Prosecutors numbered 2802, based on the payment elements specified as per their rank, degree and grade in subparagraph (a).

Article 19 – All rights granted herein to permanent and temporary members shall take effect on the date that their contributions are first deducted.

Benefits Provided by the Fund

Article 20 – The benefits to be provided by the Fund to its members or, in case of death, their heirs shall be as follows:

  1. Benefits to permanent members in the form of one time lump-sum payments:
    1. Retirement benefit;
    2. Disability benefit;
    3. Death benefit;
    4. Housing Acquisition benefit in the case of members who elect to participate in the Housing Savings Fund, the rules and regulations of which shall be determined by the General Assembly.
  2. Benefits to temporary members (while they are contributing):
    1. Disability benefit;
    2. Death benefit.
  3. Benefits to those members participating in the pension system shall, however, be as follows:
  4. Pension benefits;
  5. Death benefit.

Article 21 – A permanent member whose membership expires due to his separation from duty, regardless of the reason for his separation from duty, shall be entitled to the retirement benefit provided that he was a member of the Fund for at least 10 years.

Members entitled to receive the retirement benefit as provided in the first paragraph who leave their organizations for whatever reason may elect to participate in the Pension System by leaving 1/4 or 2/4 or 3/4 or the entire amount of their retirement benefit in the Fund.

Members entitled to receive a full and permanent disability benefit pursuant to paragraph a) of Article 26 may elect to participate in the Pension System by leaving 1/4 or 2/4 or 3/4 or the entire amount of their disability benefit in the Fund. Members entitled to receive a partial disability benefit pursuant to paragraph b) of Article 26 may elect to participate in the Pension System by leaving 1/4 or 2/4 or 3/4 or the entire amount of their partial disability benefit in the Fund.

The spouse of a member who dies while he or she is a member of the Fund shall be entitled to participate in the Pension System by leaving such spouse’s inheritance share of such member’s retirement benefit or a larger amount, and, in case of the death of a member participating in Pension System, such spouse may elect to participate by leaving in the Fund an amount (including any supplement that may be necessary) equal to 1/4 or 2/4 or 3/4 or the entire amount of the reserve to be paid to the heirs. In case of the death of the spouse of a member participating in the Pension System, the accumulated reserve shall be paid to such member’s legal heirs.

If the benefit payable to any member receiving a full disability benefit or a partial disability benefit or to the spouse of a member who dies in active service shall be less than twenty (20) times the monthly salary of a colonel, and if such member or spouse elects to participate in the pension system, such member or spouse may increase the amount otherwise left in the Fund up to such amount.

Those who elect to participate in the pension system may elect to increase or reduce their contribution shares of 1/4, 2/4, 3/4 or in full in such a manner as will cause their account bal- ance as of the current year to remain at one of those portions. The right to reduce such amount may be used only once and no earlier than three years after the date of entry into the system. The right to increase such amount may be used once every year.

If a member participating in the system dies, the spouse of such member shall not have the right to add the amount of the death benefit to the retirement reserve.

Members participating in the system shall have the right to leave the system by taking their reserves no earlier than three years after entering the system. However, anyone leaving the system shall not thereafter be readmitted to the system.

Applications to leave the system shall be made in December of each year and shall be implemented following the next succeeding regular General Assembly meeting.

Rights of members who leave the system shall survive until complete payment of such member’s reserve.

Article 22 – The heirs of those members who die while they are permanent or temporary members of the Fund shall be entitled to receive the death benefit of such member.

Article 23 – The contributions of any permanent member whose membership in the Fund expires due to any cause other than those specified in Articles 21 and 25 shall be returned to such member. However, no repayment shall be made either to any permanent member whose period of membership has been less than three years or to any temporary member.

Regardless of the reason for the termination of the membership of any member, all amounts contributed by such member to the Housing Savings Fund shall be repaid together with earnings thereon notwithstanding the time period set forth in the first paragraph.

Article 24 – The retirement benefit shall be calculated as the amount of savings plus 5% annual technical interest for the period of membership in the Fund for which dues were paid.  In calculation of membership periods, fractions of months shall be considered full months.

Pension benefits shall consist of interest at 5% per annum on the amount of the member’s retirement benefit kept in the Fund.

Article 25 – If a member dies while he/she is still contributing to the Fund, a death benefit corresponding to 12 times the most recent monthly pay of such member shall be payable. In addition, a retirement benefit to be calculated in accordance with Article 24 with respect to the period of subscription of the deceased member shall be payable.

Such benefit shall be paid to the heirs who have been designated by the deceased member in a declaration submitted by the member to the Fund.

If a member participating in the Pension System dies, a death benefit of 10 times the amount of the member’s latest monthly pension shall be paid to the member’s legal heirs. No death benefit shall be paid to the legal heirs of a spouse of a member who died while a member of the Fund.

Article 26 – Disability benefits shall be payable as follows:

a. Full and permanent disability means that the member is indisputably deprived of any possibility of employment due to accident, disease or disability be it on duty or otherwise as confirmed by a report of a health commission.

Neither a temporary or partial disability nor a temporary state of ill health shall constitute full and permanent disability. However a state of paralysis affecting half the body, the loss of both arms or both legs, two hands, two feet, two eyes, one arm and one leg, one hand and one foot, or a permanently incurable disease or other disease which is confirmed by a health commission report to be incurable and which is accepted by the Fund as a cause preventing the member from continuing such member’s duties shall be deemed full and permanent disability.

The benefit for full and permanent disability due to disease shall not be paid until one year after such state of disability has been confirmed.

The benefit for full and permanent disability shall be calculated and adjusted in the same way as the death benefit as specified in Article 25.

b. A member who is permanently but partially disabled due to an accident shall be entitled to a partial disability benefit in accordance with rates indicated in Table No. 2 annexed to this Law.

The amount of the partial disability benefit shall be equal to 12 times the most recent pay of such member multiplied by the applicable percentage set forth in such table.

Should a partial disability cause the discharge of the member from active duty, then the member's retirement benefit which shall have accumulated at the date of separation from ser- vice shall be paid to such member.

If the disability appears to be deliberate or caused by the use of alcohol or narcotic drugs, only the retirement benefit which shall have accumulated at the date of such disability shall be payable.

Inability to work due to old age or loss of physical capability shall not be deemed disability, nor shall any payment be made for disabilities arising after the age of 65.

The disability benefit paid for the disability of a given organ shall be deducted from the dis- ability benefit otherwise payable in the event of an additional disability of the same organ.

The term “loss of the whole or part of an organ” means unconditional and indisputable loss of the use or function of such organ or part.

There shall be no compensation for the loss of the whole or a part of an organ which did not function or could not be used prior to the accident that resulted in such loss. The sum of benefits payable for disabilities of various organs or parts of organs due to the same accident shall not exceed 12 times the latest pay of such member.

Article 27 – Entitlement to a disability benefit shall expire if the member or other relevant person fails to notify the Fund thereof in writing within one year after such disability has been detected or within five years after the occurrence of the incident which caused such disability.

Article 28 – Death and disability benefits may not be combined.

Article 29 – Benefits set forth in Articles 21, 24, 25 and 26 may be increased in accordance with principles to be determined by the Board of Directors based on the technical balance sheet to be prepared as required by paragraph e) of Article 11 depending upon the financial condition of the Fund. However, resolutions of the Board of Directors to increase benefits shall become effective only upon their approval by the General Assembly.

Half of any benefit increase approved by the General Assembly shall be added to the monthly pension of members participating in the Pension System and half shall be added to such members’ reserves. However, upon request of a member, the amount to be added to the monthly pension may be partially or completely added to the reserve of such member.

Article 30 – If a member who is suspended from duty or assigned to Ministry duty or whose dues cannot otherwise be collected pays dues with respect to such period, then such pe- riod shall be added to the period used for calculation of such member’s retirement, disability and death benefits. However, members who have not paid their dues corresponding to such period who die or become disabled during such period shall be entitled to a retirement benefit corresponding to the period during which they contributed to the Fund.

The Board of Directors may establish arrangements to enable such member to pay their dues.

Article 31 – Dues shall be levied on the wages and salaries of members at the time of payment and shall be indicated on their payrolls by the payroll officer. Dues shall be deducted from the earnings of members by the relevant paymaster.

Paymasters shall, within one month, transfer such dues directly to the Fund or to a bank account of the Fund determined by the Board of Directors or, in locations where there is no bank, to the Fund by deposit with the postal system. During such same time period, paymasters shall send to the Fund dues check-off sheets prepared by the payroll officer in accordance with requirements determined by the Fund.

Anyone who fails to levy, deduct, or transfer such dues to the Fund within the time limit specified above shall be liable for such dues together with a 10% penalty for delay, which amounts shall be collected by the local offices of the Ministry of Finance pursuant to the Law on Collection of Public Debts and shall be transferred to the Fund.

Article 32 – The Board of Directors shall determine the allocation of assets of the Fund to the acquisitions, borrowings, and other activities specified in Article 33 in order to achieve the goals and objectives of the Fund, shall determine the benefits to be derived there from, and shall submit for the examination and approval of the General Assembly activity reports it shall prepare in connection therewith.

In addition to the foregoing, the Board of Directors shall also define and submit for approval of the General Assembly the qualifications and conditions that permanent members of the Fund shall be required to meet to benefit from the credit facilities and services specified in items f), g), h) and m) of Article 33.

Management of Assets of the Fund and Services to be Rendered by the Fund

Article 33 – The Board of Directors is authorized, with a view to ensuring the attainment of the goals and objectives of the Fund and investing and managing the assets of the Fund, to:

  1. Acquire real and personal property including all kinds of securities;
  2. Establish any kind of company, hold participating interests in such companies and in companies established by others, and to buy shares of any company to the extent that it finds such action needed and in the best interests of the Fund;
  3. When needed, sell or transfer to third parties, pledge or mortgage all kinds of real and personal property, including shares and other securities owned by it;
  4. Enter into all kinds of borrowing, with or without compensation;
  5. Accept pledge or mortgage interests to ensure the repayment of debts due to the Fund;
  6. Extend mortgage loans for up to 20 years with interest to permanent members of the Fund for housing construction purposes;
  7. Construct housing on land which belongs to the permanent members of the Fund or to cooperatives created by such members and sell such housing to such permanent members against cash payment or pursuant to interest-bearing mortgage loans with terms of up to 20 years;
  8. In order to provide housing for permanent members, set up a Housing Savings Fund and buy land and construct housing on such land or acquire other real estate for such purpose for sale to permanent members for cash or pursuant to interest bearing mortgage loans with terms of up to 20 years;
  9. Take all the necessary initiatives to meet all kinds of social requirements of the permanent members of the Fund such as military markets (commissaries), military hotels, officers’ clubs, military student dormitories, etc.;
  10. Establish special schools and offer scholarships for education and training both within the country and abroad for the children of permanent members as needed;
  11. Invest a part of the assets in real estate in areas which show a high likelihood of development in a way to generate the maximum possible benefits;
  12. Create a credit fund for making loans to permanent members.

Article 34 – The Fund may accept all kinds of donations from individuals, in cash or in kind, be it in the form of personal property or real estate, to become the property of the Fund upon their death and to provide a fixed monthly or annual income to such donors during their lifetimes.

Exemptions of the Fund

Article 35 – The Fund shall have the following exemptions:

  1. The Fund shall be exempt from taxes on Corporations;
  2. Donations made to the Fund and benefits of any kind provided by the Fund to its members or to their legal heirs shall be exempt from Income Tax and Inheritance Tax;
  3. The Fund shall be exempt from stamp duty in connection with its transactions;
  4. Dues collected from permanent and temporary members shall be exempt from Income Tax;
  5. All kinds of revenues of the Fund shall be exempt from Expenditure Tax.

Article 36 – The Fund shall be entitled to the benefits of Law No: 6188 with respect to the construction of housing for its members.

Article 37 – All of the property of the Fund as well as all of the revenues of and debts due to the Fund shall enjoy the same rights and privileges as State property. Offences against such property shall be subject to the same legal remedies as offences against State property.

Article 38 – The financial status of the Fund shall be reviewed by actuaries under direction of the Board of Directors every five years or, in case of a general increase in the salaries of permanent and temporary members, within six months following such increase, and the resulting report shall, after it is approved by the General Assembly, be submitted to the Ministry of National Defense for the purpose of amending this Law as may be necessary.

Article 39 – In case of a war in which the Turkish Armed Forces may physically take part, whether within or outside the country, retirement, disability and death benefits shall be suspended as of the beginning of such war, and accumulated dues or retirement benefits of members who die or separate from the Armed Forces or the Fund during such period shall be paid to such members or to their heirs after the war is over.

Whether benefits in addition to the return of dues shall be payable for those who die or become disabled during a war shall be decided by the General Assembly upon the proposal of the Board of Directors with due consideration to the financial status of the Fund and the amounts to be paid to those who die or become disabled.

Dues and other benefits which have not been claimed within five years without any reason recognized by law shall be added to the general assets of the Fund.

Fiscal Year of the Fund

Article 40 – The fiscal year of the Fund shall be the calendar year.

The first balance sheet of the Fund shall cover the period between the effective date of this Law and the end of the following calendar year.

Transitional Article 1 – The Military Credit Fund Regulation dated 30 March 1327 is hereby repealed. The assets and liabilities of that fund as at the effective date of this Law shall be transferred to the Armed Forces Assistance Fund. However, that fund shall continue to function under its repealed regulations until such time as the Fund inaugurates its own credit fund.

Transitional Article 2 – Those persons covered by this Law on the date it becomes effective by reason of being on active duty on such date shall be entitled to have prior periods of similar service included for the purpose of calculating the minimum period defined in Ar- ticle 21. Such previous terms of service, however, shall not be taken into account in the calculation of retirement, disability, and death benefits or entitlement to the benefits listed in the second paragraph of Article 32. For those members who pay their dues for up to 10 years of prior service on the basis of the salary levels in effect on the effective date of this Law corres- ponding to their former ranks or levels, either as a lump sum payment or in conformity with rules to be established by the Board of Directors, shall be entitled to retirement, disability, and death benefit amounts calculated according to the number of years for which they have paid their dues, and the criteria to be established pursuant to the second paragraph of Article 32 shall also take such periods into account.

In case of death or disability of such members before they have completed the payment of their retroactive dues, the unpaid amount shall be deducted from the benefits which have become payable to such members or their heirs.

Transitional Article 3 – The dues to be collected before the Fund has begun operations shall be deposited in accounts to be opened in the name of the Fund in national banks designated by the Ministry of National Defense.

Transitional Article 4 – Death or disability benefits which become payable for members who have paid their dues starting from the effective date of this Law shall be paid after the Fund has begun operations.

Transitional Article 5 – A committee shall be set up by the Ministry of National Defense to undertake the necessary preparatory work for the establishment of the Fund. The committee shall prepare the regulations specified in Article 3 above to elect members of the Representative Assembly and to nominate members of the Board of Directors as provided in the first and second paragraphs of Article 8 and the auditor and substitute auditors as provided in Article 6.

Transitional Article 6 – Persons who, after the effective date of this Law, become entitled to receive retirement benefits under the provisions of Articles 21, 25 and 26 of Law No. 205 but who left the Fund before it began operations shall be given a one time opportunity to elect to participate in the Pension System pursuant to procedures determined by the Fund provided that application shall have been made within two years and provided that the required sum of money shall have been deposited with the Fund. The provisions of Article 19 shall be waived for such members and their rights shall be determined by taking into account their former period of membership in the Fund plus the period in the system.

Article 41 – This Law shall become effective on 1 March 1961.

Article 42 – This law shall be implemented by the Council of Ministers.

 

ANNEX

Table No: 2

Armed Forces Assistance Fund Disability Table

[Table No: 1, “Armed Forces Assistance Fund Coefficient Table," was repealed by the amendment of Article 24 by Law No: 4148, 26 June 1996.]

 

 

Percentage of insurance (%)

 

Right

Left

Total loss of arm or hand

60

50

Total loss of shoulder movement

25

20

Total loss of elbow movement

20

15

Total loss of wrist movement

20

15

Total loss of thumb and index finger

30

25

Total loss of one finger other than index finger in addition to thumb

25

20

Total loss of one finger other than thumb in addi- tion to index finger

20

15

Total loss of three fingers other than thumb and index finger

25

20

Total loss of thumb

20

15

Total loss of index finger

15

10

Total loss of middle finger

10

8

Total loss of fourth finger

8

7

Total loss of small finger

7

6

Total loss of one leg above the knee

50

Total loss of one leg below the knee

40

Total loss of one foot

40

Partial loss of one foot (including toes)

30

Total loss of movement in one hip

30

Total loss of movement in one knee

20

Total loss of movement in one ankle

15

Total loss of one big toe

8

Malfunctioning of a broken leg after treatment

30

Malfunctioning of a broken foot after treatment

20

Malfunctioning of a broken knee-cap after treatment

20

Loss in length of a leg by 5 cm or more

15

Total loss of one eye or 50 % loss of vision of both eyes

25

Total deafness of both ears

40

Total deafness of one ear

10

Malfunctioning of broken lower chin after treatment

25

Total loss of lower chin

30

Total loss of one toe

10

In case of less than total loss or malfunction, the percentage of loss or malfunction shall be applied to the percentage shown in the above table.