BES and OKS fund size exceeds 1 trillion TL

As BES marks its 20th anniversary, it continues to contribute to the national economy by increasing the level of long-term savings domestically, alongside providing returns to its participants through retirement funds.

According to information compiled from the Pension Monitoring Center, as of the end of June, the fund size of BES participants reached 839 billion 387.5 million TL, with the state contribution fund size amounting to 118 billion 584.5 million TL. Thus, the total fund size of participants reached 957 billion 972 million TL. In OKS, the total fund size, including the state contribution, rose to 72 billion 530.2 million TL.

EXCEEDING 254 BILLION TL

By the end of 2023, the number of BES participants was recorded at 8 million 676 thousand 46, with a fund size of 625 billion 517.8 million TL. The state contribution fund size was 77 billion 750.8 million TL.

In the same period, OKS saw 7 million 303 thousand 50 employees accumulating a fund size of 49 billion 972.5 million TL, with a state contribution of 3 billion 180.4 million TL. The sector concluded 2023 with a total fund size of 756 billion 421.5 million TL and 15 million 979 thousand 96 participants, including both BES and OKS.

From the end of 2023 to June 28, the fund size of BES participants increased by 213 billion 869.7 million TL, while the state contribution fund size rose by 40 billion 833.7 million TL, indicating a 26.7% increase in total fund size. In the same period, the fund size of OKS participants, including the state contribution, increased by 19 billion 377.3 million TL.

Considering the state contribution fund sizes, the total increase in BES and OKS fund sizes from the end of 2023 to June 28, 2024, was 274 billion 80.7 million TL. The number of BES participants increased by 459 thousand 900 to 9 million 135 thousand 946, while the total number of participants, including OKS, rose to 16 million 457 thousand 210. Thus, the total number of participants in the system increased by 3% in the first half of the year.

240 BILLION TL IN NON-INTEREST FUNDS

Of the BES fund size, 651 billion 648.1 million TL is in interest-bearing funds, and 187 billion 739.4 million TL is in non-interest-bearing funds. The state contribution fund size includes 107 billion 756.3 million TL in interest-bearing funds and 10 billion 828.2 million TL in non-interest-bearing funds.

In OKS, 29 billion 81.3 million TL of the fund accumulated by 7 million 321 thousand 264 employees is in interest-bearing funds, and 38 billion 901.8 million TL is in non-interest-bearing funds. The state contribution fund size in OKS includes 1 billion 857.2 million TL in interest-bearing funds and 2 billion 689.9 million TL in non-interest-bearing funds.

PARTICIPATION OF UNDER-18 IN BES EXCEEDS 1.2 MILLION

The scheme allowing under-18s to voluntarily join the system, introduced three years ago in Turkey, continues to grow.

As of June 21, the fund size for under-18 participants reached 22.3 billion TL. Of this, 17 billion 823.2 million TL comes from the participants' savings, and the state contribution fund size is 4 billion 501.9 million TL. The system includes 1 million 229 thousand 379 children, with the highest participation of 106 thousand 926 at zero age.

From December 31, 2023, to June 21, 213 thousand 835 people joined the under-18 scheme, with the fund size, including the state contribution, increasing by 79% to 22 billion 325 million 171.8 thousand TL.

"MARKET RETURNS KEY TO GROWTH OF THE POOL"

HDI Fibaemeklilik General Manager Erol Öztürkoğlu said that market returns are the key factor in the growth of the pool.

Recalling the sector's target of 1.3 trillion TL by year-end, Öztürkoğlu stated:

"Although regular payments by participants and new entries to the system contribute, the growth in the fund is driven by asset returns. Looking at the second half of the year, increases are expected in the stock market, gold, and fixed income assets. Therefore, I predict that the target of 1.3 trillion TL by the end of the year can be surpassed."

Öztürkoğlu emphasized that lower inflation means higher savings rates, making above-inflation returns more apparent, which will positively contribute to fund growth in BES.

Commenting on the impact of the partial withdrawal option introduced in July, Öztürkoğlu stated:

"Partial withdrawal serves a specific group and may not have a significant impact in the short term, by the end of this year, but in the medium to long term, it will prevent exits from the system. Its impact on collateral funds will be limited in the current market, as banks still face certain limitations in lending. The presence of these mechanisms in the system is what matters. They will have a greater impact on system participation and retention in the future."

Öztürkoğlu highlighted the need for investment fund rights to be extended to individual retirement funds for investment diversification.

He noted that currency-denominated funds still cannot be established in the system and said, "Regulations on how venture capital funds can be used more effectively in individual retirement will contribute more to the investment universe in BES and attract qualified long-term investors to the system."