Marion James, Istanbul
Every quarter ING Bank publishes a report into Turkey’s Investment Preferences. The most recent version of the report (Q3 2016) gives pension companies the good news that BES pension agreements are the second most popular investment vehicles (amongst those who actually make any investments).
At 26% they were only just pipped into first place by interest-bearing term bank deposits at 27%.
This is good news for the government, too, as it justifies the amount of money spent on the State Contribution. When the BES system was designed in 2001 the government intended that it would increase Turkey’s savings ratio and provide an inflow of capital for the money markets, alongside the more obvious aims of providing income for citizens in retirement thereby reducing their reliance on State benefits.
Looking at the trend in ING Bank’s report over the period since it was launched in 2011 it is clear that these macro-economic aims are beginning to be met.
At the end of 2011, only 5% of investors were reported to be using a BES fund as a savings vehicle.
This has dramatically risen as follows:
2011 Q4: 5%
2012 Q4: 14%
2013 Q4: 17%
2014 Q4: 16%
2015 Q4: 16%
2016 Q1: 18%
2016 Q2: 23%
2016 Q3: 25%
The introduction of Automatic Enrollment is expected to see these figures rise further, but how successful that will be depends on the number of participants who take advantage of the option to quit the system within 2 months of joining.