The individual pension system has been consistently growing since its establishment in 2003.

According to data compiled from the Pension Monitoring Center (EGM), a total of 9,061,975 people have participated in the system, bringing the total fund size, including state contributions, close to 934 billion Turkish Lira.

In the Automatic Enrollment System (OKS), there are 7,323,573 participants, with a fund size of around 69 billion Turkish Lira, also including state contributions. Consequently, the total fund size of both the individual pension system (BES) and OKS has reached 1 trillion 2 billion 409 million Turkish Lira since their inception, with the total number of participants increasing to 16,385,548.

The sector ended the year 2023 with a fund size of 756 billion 421.5 million Turkish Lira and a total of 15,979,096 participants, showing an increase of 406,452 participants and a total fund growth of 245 billion 988.1 million Turkish Lira since the beginning of the year.

FUND SIZE FOR UNDER 18s EXCEEDS 20 BILLION LIRA

As of the week ending May 10, there were 1,184,373 participants under the age of 18, with the highest participation rate being 102,014 for newborns.

During this period, the total fund accumulated by participants under 18 reached 20 billion 52 million Turkish Lira, including state contributions.

“REACHING 1 TRILLION LIRA FOR BES WILL BE A SIGNIFICANT MILESTONE”

Taha Çakmak, General Manager of Türkiye Sigorta, stated that reaching 1 trillion Lira for the individual pension system would be a significant milestone. He noted that in recent years, the BES has become one of the most preferred savings and investment tools.

“BES offers various options with different fund baskets for those looking to make long-term investments and savings while also providing security for individuals during their retirement years with a 30% state contribution. BES has become a vital financial assurance enhanced by state contributions, representing a growing value for both the sector and the country’s economy. As you know, individual pension funds often lead participants towards long-term investments, supporting sustainable growth for the national economy,” Çakmak said.

He also pointed out that 1.2 million participants in the system are under 18, and the interest surged with the opportunity for under-18 participation will further accelerate with partial withdrawal and transfer rights set to be implemented in the summer.

In reference to the Supplemental Pension System (TES) planned to be implemented in the fourth quarter of the year as per the Medium Term Program, Çakmak explained that “the transformation of OKS into TES is designed to compensate for income loss during retirement, ensure the preservation of living standards during working years, and promote additional retirement income while increasing household savings. We expect that with the employer contributions, the transformation of OKS into TES will further popularize and grow the BES.”

“HIGH PERFORMANCE OF FUNDS WILL PLAY A SIGNIFICANT ROLE IN GROWTH”

Murat Atalay, General Manager of Anadolu Hayat Emeklilik, recalled that the sector celebrated reaching a fund size of 500 billion Turkish Lira in June 2023 and noted that within a year, they are already nearing the 1 trillion Lira mark.

“BES continues to overcome critical thresholds set as targets one by one. We consider the development here very important in terms of effectively utilizing the potential of individual pensions and thereby contributing to our country’s long-term financial needs while supporting sustainable economic growth,” he stated.

Atalay emphasized that the individual pension sector is heavily supported by public authorities and added, “2024 will be a year where the newly prepared regulatory changes for BES will be implemented. We expect that the innovative moves by the public authorities to support BES will have positive effects not only on existing participants but also on individuals who have yet to be introduced to the system. With these innovations, the financial inclusivity and sustainability of BES will be enhanced.”

Atalay also highlighted that the conversion of OKS into TES will be a development that could potentially triple the participant base of OKS, contributing to the social security system, economic stability, and the welfare of citizens through the union of BES and TES.

“THIS FIGURE SHOWS THE RELIABILITY AND STABILITY OF BES IN THE SECTOR”

Fırat Kuruca, General Manager of AgeSA Life and Pension, stated that BES plays an important role in increasing the income and welfare of participants while being a significant resource for the development of the growing Turkish economy.

He emphasized that BES’s fund size exceeding 1 trillion Lira indicates the amount of long-term investment directed into the economy, contributing positively to the development of capital markets. Additionally, this figure also illustrates the reliability and stability of BES in the sector. We can also say that there is an increased awareness of retirement in society, attracting potential new participants. In 21 years, both the system and our sector have made significant progress, achieving a strong growth rate. We must build upon this and recognize that expanding our investments goes beyond relying solely on external sources. A strong economy relies on such long-term savings. As a society, we need to learn more about saving and enhance our efforts in this regard.”

Kuruca also noted the developments that are promoting industry growth, such as increasing the state contribution to 30%, including participants under 18, and the high performance of pension funds, stating that they foresee further growth for both the system and the sector through new incentives and regulations.

He indicated that the TES, expected to include 25 to 30 million people, could be implemented by 2025, emphasizing that TES is critical for reducing risks related to the social security system and will serve as a supportive element for sustainable growth.


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