As the Individual Retirement System (BES) celebrates its 21st year, it continues to contribute to the Turkish economy by increasing long-term savings levels domestically while also providing returns to its participants.
According to data compiled by the Pension Monitoring Center, as of October 31, the total fund size in BES reached 1 trillion 64 billion 164.8 million liras, consisting of 943.5 billion liras in participant funds and 120.6 billion liras in government contributions. Additionally, the total size of the Optional Private Pension System (OKS) funds, including both participant contributions and government contributions, grew to 78.07 billion liras.
A 385 Billion Lira Increase in Total Fund Size
At the end of 2023, the number of BES participants was recorded at 8.67 million, with a total fund size of 625.5 billion liras and government contributions of 77.75 billion liras. In OKS, the total fund size stood at 53.2 billion liras, with 3.18 billion liras in government contributions.
From the end of 2023 to October 31, 2024, BES saw an increase of 360.9 billion liras in participant funds, including government contributions, while OKS participants accumulated an additional 24.9 billion liras. In total, the fund size of both BES and OKS increased by 385.8 billion liras during this period, with the total number of participants rising to 9.4 million in BES and 16.97 million across both systems.
Interest-Free Funds Continue to Grow
Out of the total BES fund size, 692.6 billion liras are invested in interest-bearing funds, while 250.9 billion liras are allocated to interest-free funds. For government contributions, 108.7 billion liras are in interest-bearing funds, and 11.9 billion liras in interest-free funds.
In OKS, of the 7.57 million participants’ funds, 30.8 billion liras are in interest-bearing funds, and 42.5 billion liras are in interest-free funds, with government contributions totaling 4.78 billion liras—partly in both types of funds.
18 and Under Participation Surges to 1.3 Million
The voluntary inclusion of participants under the age of 18, introduced in June 2021, continues to grow. As of October 31, the total fund size for under-18 participants reached 30.2 billion liras, with 24.8 billion liras accumulated by participants themselves and 5.4 billion liras contributed by the government. In total, 1.36 million children have joined the system, with the highest participation seen among newborns, totaling 121,302 individuals.
Since December 2023, the fund size for this group has increased by 17.7 billion liras, and the number of participants has risen by 346,772.
Pension Funds Used as Collateral for Loans
On October 31, a total of 560 credit applications were made, with 164.7 million liras used as collateral. Among these, 485 applications were approved for collateral worth 135.2 million liras, and the remaining 453 were transferred to the central debt transfer fund, totaling 121.2 million liras in collateral.
Additionally, the partial payment application for marriage and home acquisition provided 73.4 million liras in total payments, including 5.4 million liras for marriage and 68 million liras for home purchases.
My Thoughts: BES continues to grow at an impressive rate, with a substantial increase in the fund size, reflecting the system’s effectiveness in promoting long-term savings for Turkish citizens. It’s also interesting to see the significant role that under-18 participation is playing in shaping the future of personal savings, which could be a game-changer for the next generation. As inflation continues to affect purchasing power, it’s reassuring to see that more people are turning to BES and OKS to safeguard their financial futures.
