Individual Pension System Progress Report

Transcription

1 Individual Pension System Progress Report 29

2

3 Individual Pension System Progress Report 29 Electronic version of this document and reference data of selected statistics are available at Press Date: April 13, 21

4 2 Individual Pension System 29 Progress Report Contents Foreword 7 1 Leaving a Year Behind Developments in the World Economy Developments in the Turkish Economy Magnitudes Regarding Social Security in Turkey 13 2 Individual Pension System Data General Overview Contracts Participants Contributions Pensioners Intermediaries and e-beas Pension Plans 48 3 Pension Mutual Funds Worldwide Pension Funds Pension Mutual Funds and Securities Mutual Funds in Turkey Asset Allocation of Fund Groups Total Net Asset Values and Average Returns of Fund Groups Returns of Pension Mutual Funds Risk Analysis of Pension Mutual Funds Management Fees of Pension Mutual Funds Pension Mutual Funds Data 68 4 Realizations in 29, Sectoral Expectations for Realizations in Sectoral Expectations for Activities and Publications in the Individual Pension System Amendments in the Legal Framework Sectoral Activities International Publications on Private Pension Systems 81 6 Selected Topics in the Individual Pension System Analysis of Projected Accumulation and Withdrawal in Retirement Selected Results of Surveys Conducted at PMC Contact Center 87 7 Pension Companies Almanac 9

5 Individual Pension System 29 Progress Report 3 Tables and Charts Yearly Growth in the World Economy 1 Fluctuations in the Consumer Price Index 11 Returns of Investment Instruments in Change in the number of Insured compared to Last Year 13 Selected Unemployment Insurance Statistics 14 Development of Number of Contracts and Amount of Contributions 18 Comparison of Total Invested Amount and Accumulations 18 Development of Pension Funds of Participants (TL) 19 Distribution of Contributions according to Contracts Establishment Reason (TL) 19 Distribution of Payments 2 Distribution of Contracts in Force and Terminated 2 Distribution of Contracts and Accumulations according to Contract Types 2 Distribution of Contracts according to Regions 21 Vesting Years 21 Distribution of Contracts according to Payment Period 21 Distribution of Terminated Contracts according to Reason (Number) 22 Distribution of Contracts in Force and Terminated 22 Distribution of Accumulations according to Contracts Age (TL) 23 Distribution of Contracts according to Contracts Age 23 Termination Ratio of Contracts according to the Month of Enforcement (%) 24 Distribution of Contracts Terminated Voluntarily according to their Age at Termination 24 Distribution of Contracts Transferred to Another Pension Company 25 Usage of Account Merging Right (Number) 25 Distribution of Participants according to Gender and Ages 26 Gender and Education Distribution 26 Participants Fund Group Preferences according to Age Groups (%) 27 Participants Fund Preferences per Fund Group (Number) 27 Participants Fund Preferences according to Contract Types per Fund Group 28 Accumulations of Participants according to Ages (TL) 28 Participants Average Monthly Regular Contribution Planning to be Paid according to Age Groups 29 Ratio of Participants to the Population according to Provinces (%) 29 Distribution of Participants according to Regions and Age Groups (%) 3 Distribution of Participants and Accumulations according to Income Levels (%) 3 Distribution of Participants according to Number of Contracts Owned (%) 31 Distribution of Participants according to Contract Types (%) 31 Distribution of Contributions according to Distribution Channel (%) 32 Distribution of Contributions according to Distribution Channel and Payment Period (%) 32 Cumulative Change in Contributions According to Contribution Type (TL Million) 33 Average Monthly Regular Contribution according to Geographical Regions 33 Average Monthly Regular Contribution according to Payment Period 34

6 4 Individual Pension System 29 Progress Report Average Monthly Regular Contribution according to Distribution Channel 34 Distribution of Contributions according to Average Monthly Regular Contribution Intervals (TL) 35 Distribution of Contributions according to Payment Instrument (%) 35 Change in Average Annual Regular Contribution (TL) 36 Change in Administrative Expenses Fee Ratio (%) 36 Cumulative Change in Fees According to Fee Types 37 Cumulative Amount of Withholding Tax 38 Change in Contributions Paid for Contracts in Force according to Years 38 Distribution of Contracts according to Payment Ability (%) 39 Change in Number of Retired Participants 4 Development of Participants according to Date they can Retire 4 Retirement in IPS 41 Ratio of Participants Staying in the System After Retirement 41 Contributions and Net Returns of Retired Participants (TL) 42 Retired Participants according to Withdrawal Amount 42 Distribution of Retired Participants according to Time Spent in the Individual Pension System 43 Contracts according to Distribution Channel 44 Ratio of Contracts and Contributions according to Distribution Channel (%) 44 Ratio of Contracts and Contributions according to Age Groups of Intermediaries (%) 45 Ratio of Contracts and Terminated Contracts according to Age Groups of Intermediaries (%) 45 Distribution of e-beas Takers according to Distribution Channel 46 Distribution of e-beas Takers and Success Rate according to Age Groups 46 Distribution of e-beas Takers Grades according to Distribution Channel (%) 47 The Progress of e-beas Takers Success Ratio 47 Pension Plans 48 Pension Funds Nominal Investment Rate of Return in Selected OECD Countries 52 Yearly Variation of Pension Fund Assetsin OECD Countries (28/27) 52 Consolidated Data of Mutual Funds as of December 31, Growth of Pension Mutual Funds 53 Net Asset Value of Pension Mutual Funds according to Fund Groups and their Growth Rate in Average Term in Pension Mutual Funds and Securities Mutual Funds 54 Consolidated Asset Allocation of Pension Mutual Funds (%) 55 Variation of Pension Mutual Funds Portfolio Allocation according to Previous Year 55 Asset Allocation of Flexible Funds (%) 56 Asset Allocation of Pension Mutual Funds in 29 according to Founder (%) 56 Total Net Asset Values and Average Returns of Fund Groups 57 Change of Net Asset Values of Fund Groups by Years (24-29) 57 Change of Average Returns of Fund Groups in Change of Average Returns of Fund Groups from the Beginning of the Individual Pension System 58 Net Asset Values of Pension Mutual Funds according to Founders and Fund Groups 59

7 Individual Pension System 29 Progress Report 5 Pension Mutual Funds that Outperformed their Benchmarks (Except Flexible Funds) 6 Data of Flexible Pension Mutual Funds 61 Returns of Pension Mutual Funds in 29 according to Fund Groups and Founders 62 Returns of Funds and their Benchmarks in Net Asset Values of Pension Mutual Funds according to Founder 63 Net Asset Values of Pension Mutual Funds according to Founder and their Growth Rate in Top 2 Pension Mutual Funds according to their Sharpe Ratios 64 Pension Mutual Funds with Positive Alpha Coefficient (Except International Funds) 65 Market Indexes Used for Fund Groups 66 Mean and Standard Deviation of Riskfree Daily Returns 66 Development of Average Monthly Fund Management Fee Ratios according to Fund Groups 67 Pension Mutual Funds Data 68 Periods of Accumulation and Programmed Withdrawal 85 Alternatives in the Decumulation Phase 86 Causes of Withdrawals 87 Expectations in Entering the Individual Pension System 88 Withdrawn Participants Consider Re-entrance 88 Usage of Tax Advantage for Withdrawn Participants 89

8 6 Individual Pension System 29 Progress Report

9 Individual Pension System 29 Progress Report 7 Foreword Completing its sixth year in 29, the individual pension system has been in a rapid growth trend despite the recent financial crisis which also has affected our country. During this period when the savings have gained greater importance, the high growth rate achieved in this voluntary system and the total fund amount raised within the system exceeding TL 9 billion is notably important. When 29 year-end data of the individual pension system is compared to that of the preceding year, we note that the total fund value grew by 42% to TL 9 billion, annual contributions increased approximately by 29%, and total participants of the companies rose by 14% to 1 million 988 thousand. Furthermore, during this period, number of the active pension companies reached thirteen, with one more company being licensed. It is noteworthy that these results were achieved in spite of the financial crisis and the relative increase in the early withdrawals from the system. It should be noted that the marked increase in early withdrawals in 29 was principally due to the global financial crisis and associated financial needs. On the other hand, the number of retirements from the system reached 1,97 as of the end of 29. It is targeted that the rapid growth of the system would go on in the upcoming years with a decrease in the percentage, and that the proportion of total fund value to gross domestic product, which is currently 1%, would rise to 1% in the 2th year of the system, i.e. year 223. For defined contribution systems such as individual pensions, major factors that affect pension savings may include contribution payment level, payment period and deductions from the system as well as investment performance. According to 28 year-end and 29 second quarterly data, Turkey achieved the highest nominal returns in private pension funds among the OECD countries. Besides the transparent and flexible structure of the individual pension system, this achievement is affected by the fact that participants largely opted for investments in fixedreturn instruments. However, significant drops in interest rates and substantial transformation of the investment environment suggest that the forthcoming period would demand alternative investment instruments to achieve higher returns performance and the system should be linked with the real economy. In this connection, actions have been initiated to offer alternative investment instruments to participants by diversifying the investment funds available within the system. On the other side, tax incentives offered by the public play an extremely important role in the improvement of systems such as individual pensions. While various nationwide sectoral polls manifest that the tax incentive offered at the time of contribution payments has been used more recently, they show that still twothirds of participants do not make use of the incentive. It is essentially important to remind and advise participants of this incentive at every stage so that the participants avail themselves of the opportunities offered to them, early withdrawals could be lowered, and a faster growth of the system is assured. Additionally, one of the most important factors of a healthy growth of the system is the high share of employer-contributed schemes. In this respect, I hope that plans put off due to the global crisis would be brought into effect in 21, and a remarkable increase in contributions made by employers for their employees be accomplished. As to the improvement of the legal framework, certain actions have been taken to provide a more effective functioning of the individual pension system in 29. Within this framework, the Individual Pension Intermediaries Regulation was revised to enhance the standards applicable to the activities of individual pensions intermediaries. Furthermore, regulations were made regarding the e-plan system that allows for pension plans to be stored in electronic media, and probable accumulation charts presented to participants. During 21, which shows us that effects of the global crisis have started to settle down in the world and our country, and holds prospects of a certain level of improvement in economic activities, our Undersecretariat will continue its efforts to assure the growth and improvement of the individual pension system in conjunction with the stakeholders in the public and private sector. By the way, I would like to thank everyone who has contributed to the Individual Pension System Progress Report 29, which I am sure is regarded with interest and appreciation. İbrahim Halil ÇANAKCI The Undersecretary of Treasury Republic of Turkey Prime Ministry The Undersecretariat of Treasury For the system to soar, tax incentive must be reminded to the participants on all occasions.

10

11 1 Leaving a Year Behind 1.1 Developments in the World Economy 1.2 Developments in the Turkish Economy 1.3 Magnitudes Regarding Social Security in Turkey

12 1 Individual Pension System 29 Progress Report LEAVING A YEAR BEHIND Developments in the World 1.1 Economy Breaking out in 28 and having its effects felt all over the world, the global economic crisis persisted also in 29, despite a reduction in its impact due to a number of extraordinary monetary and fiscal policy measures taken by the countries. Injection of liquidity into markets by Central Banks led to an accelerated economic recovery and a positive development of expectations particularly in developing countries. While the economic stagnancy experienced at a global scale has resulted in shrinkage of the global economy, developed countries felt it more severely, but the recuperation was also quicker. Although most countries tended to grow towards the end of 29, it is estimated that the global economy, having shrunk by.8%, will grow by 3.9% in 21, with the prediction that developed countries will have relatively lower growth rates, as opposed to developing countries foreseen to display a faster growth curve. for developing countries declined to.1% in developed countries and 5.2% in developing countries in 29. Rates were 2.7% in the US, -1.7% in Japan, and.3% in Euro zone. IMF upped their 21 inflation expectation to 1.3% for developed countries, and 6.2% for developing countries. The economic crisis affecting the whole world and the consequent contraction of the worldwide trade volume brought about a decrease in employment and an increase in unemployment rates. Unemployment rate of 5.8% in the US in 28 is expected to be 9.3% in 29, while it is predicted to rise from 7.6% to 9.9% in the Euro Zone, and up to 5.4% from 4.% in Japan. As for 21, it is forecast that unemployment rates in these countries will further go up, and be as high as 1.1% in the US, 11.7% in the Euro zone, and 6.1% in Japan. Oil prices, showing an upward trend in the second half of 29 Yearly Growth in the World Economy EXPECTATION Source: IMF, World Economic Outlook Update, January 21 In parallel with the shrinkage of the global economy, world trade volume declined by 12.3% in 29. Despite the economic improvements in developing countries, the weaker growth trend in developed countries reduced the volume of exports to these countries. World trade volume is expected to grow by 5.8% in inflation rates of 3.4% for developed countries and 9.2% due to the economic recovery, rose up to USD 77.6 at the end of 29, from USD 39 as of the end of 28. The negative outlook of the 29 economic indicators and the slow recovery of markets caused central banks of some of the developing countries, namely, the US, Europe, United Kingdom and Japan, to avoid a change in interest rates. The FED kept interest rates at.25%, European Central Bank at 1%, Bank of England at.5% and Bank of Japan at.1%.

13 Individual Pension System 29 Progress Report 11 Developments in the Turkish 1.2 Economy Gaining momentum and affecting the whole world adversely during 28, the global economic crisis continued its effects in 29, though at a reduced level. While increasing public expenditures contributed to growth, the declining private sector investment demand led to both a rise in unemployment rates and shrinkage of growth. Growing by.9% in 28, Turkish economy contracted by 14.5% in the first quarter of 29, 7.7% in the second, 2.9% in the third quarter and grew by 6% in the fourth quarter, which totals to an annual shrinking of 4.7%. While State Planning Organization estimates a 3.5% growth rate for 21, the World Bank s estimate is a lower 3.3%. (State Planning Organization Main Economic Indicators, World Bank Global Economic Prospects 21) Inflation rate targeted as 7.5% for 29 started rising in January 29, and tax adjustments made in the third quarter in order to achieve public fiscal balance caused domestic demand to rise and consumer durables prices to decline. Consequently, the inflation rate was 5.93% for consumer prices index, and 6.53% for producer prices index as of the end of 29. Targeted inflation rate was announced as 6.9% (consumer price index) for 21. (State Planning Organization, 21 Annual Program, TCMB Inflation Report 21-1) 29 budget expenditure was TL 267 billion, and budget revenues were TL 215 billion. 29 central government budget deficit reached TL 52 billion by a rise of 199.5% from the preceding year. (Ministry of Finance, Central Government Budget Report) In 29, exports were down to USD 12.2 billion by a decline of 22.6% from 28, while imports were USD 14.8 billion by a decline of 3.3%. During the same period, foreign trade deficit dropped from USD 69.9 billion down to USD 38.6 billion by a decline of 44.8%. Export/import ratio was 72.6% in 29. Current account balance deficit decreased from USD 41.9 billion in 28 to USD 13.9 billion in January December 29. (Turkstat, Foreign Trade Statistics, December 29) Stock of domestic public debt increased from TL billion at the end of 28 to TL 33 billion in 29. As of the end of 29, TL billion of the stock of domestic public debt consisted of bonds, and TL 14 billion consisted of bills. Average maturity period, which was 31.9 months as of the end of 28, went up to 35.3 months at the end of 29. In December, the compound interest rate generated in discounted Treasury auctions in TL was 9%, while average compound interest rate for discounted public debt in TL was 11.6% in 29. (Undersecretariat of Treasury, 29 Domestic Public Debt Statistics) Net inflow of direct international investments in 29 decreased to USD 7.6 billion by a decline of 58.4% from the preceding year. During this period, USD 1,6 billion of direct inflow of international investments originated from electricity, gas and water sector, and USD 1,6 billion from the manufacturing industry sector. (Undersecretariat of Treasury, Bulletin of Direct International Investments Data January 21) Fluctuations in the Consumer Price Index (%) January February March April May June July August September October November December Ratio (%) Source: Turkstat

14 12 Individual Pension System 29 Progress Report LEAVING A YEAR BEHIND Residents total portfolio as of November 29 reached TL 65,4 billion by a rise of 13.2% from the preceding year. 47.6% of this portfolio was composed of TL deposits, and 22.9% was composed of foreign currency deposits. During the same period, non-residents portfolio total was USD 79.5 billion. 6.5% of non-residents portfolio total, which increased by 58% from the 28 year-end, consists of investments in stocks. (State Planning Organization, Developments in Financial Markets December 29) During late 29, the Monetary Policy Board decelerated their interest rate discounts due to improvements in global risk perceptions and normalization trend in financial markets. Central Bank reduced borrowing interest rate from 15% in 28 year-end to 6.5% in November 29. (TCMB, Inflation Report 21-1) effects of the crisis be continued along with macroeconomic policies and targets to be implemented in 21. It is forecast that employment level would rise to 21.3 million persons, subject to growth of investments through cooperation of public and private sectors, but the unemployment rate would rise up to 14.6% from 14% in 29. Tax load, inclusive of social security liabilities, calculated proportioning tax and other financial obligations to GDP is expected to rise from 24% to 26.2% in 21, and central government budget is expected to yield an approximate deficit of TL 5 billion. The expectation that exports would be around USD 17.5 billion, and imports would rise up to USD 153., with a greater increase than imports, will cause foreign trade balance to yield a deficit in 21. (State Planning Organization, Medium- Term Program ) It is planned that the moderate economic recovery seen during late 29 and flexible budgetary practices intended to relieve Returns of Investment Instruments in 29 ISE-1 Index KYD Eurobond Bond Indexes EUR-TL 1 KYD Whole Bond Index (TL) KYD Type B Fund Index 8 6 Return (%)

15 Individual Pension System 29 Progress Report 13 Magnitudes Regarding Social 1.3 Security in Turkey Effects of the crisis on global economy, which were especially felt severely in the first 9 months of 29 in our country, added to the long standing imbalances in macro data regarding social security. While the imbalances often had structural roots in the past, importance of actuarial and financial aspects grew due to the shrinking economy and rising unemployment rates in this period. Due to the declining number of the insured and the drop in collection of premiums, social security premium revenues decreased, as a consequence of which social security deficits reached some TL 28.7 billion, and transfers from the budget TL 52.6 billion. Last year, these figures were TL 25.9 billion and TL 35. billion, respectively. By the end of 29, population of Turkey was 72,561,312, population under social security coverage was 58,348,616, total number of active insured persons was 15,143,22 and number of passive insured persons was 8,488, % of the active insured are subject to 4/a (formerly SSK), 21% to 4/b (formerly BAG-KUR), and 15% to 4/c (formerly the Pension Fund for Civil Servants). 58% of the passive insured are subject to 4/a, 23% to 4/b, and 19% to 4/c. The active insured decreased by.8% as compared to the previous year-end, and the passive insured increased by 5.4%. The proportion of the population under the coverage of social security to the total population reduced to 8% from While the active/passive ratio, calculated by dividing number of active insured persons by the number of retired persons, was 1.9 in 28, it further declined to 1.78 in 29. Total premium revenues of the Social Security Institution in 29 were TL 54.6 billion, including restructuring. During this period, TL 38.1 billion was collected from those covered by 4/a, TL 5.1 billion from 4/b, and TL 11.5 billion from 4/c. On the other hand, a pensions payout of TL 67.4 billion was made under the Social Security Institution (SSI). Pension payout of TL 38.4 billion was made to the retired under the coverage of 4/a, TL 1.8 billion to the retired under 4/b, and TL 18.3 billion to the retired under 4/c. Another indicator of the economic crisis has been the compensations made from the unemployment insurance. Applications for unemployment insurance, which were at high levels by April, started to decline to a certain extent as from May. Beneficiaries of the unemployment insurance raised to its highest level of 317 thousand 766 in April, and gradually dropped thereafter. As of the end of 29, assets of the Unemployment Insurance Fund reached TL 42.1 billion. Recorded as TL 38.4 billion at the end of 28, the fund achieved an annual growth of 9.6%. At the same time, under the provisional article 6 of the Law No. 4447, Monthly change in the number of compulsorily insured during 29 is as follows. Change in the number of Insured compared to Last Year 4 4/a 4/b 4/c Change (%) Months Source: SSI Statistics

16 14 Individual Pension System 29 Progress Report LEAVING A YEAR BEHIND TL 1.3 billion was transferred from the fund to the Treasury s budget for investments under Southeastern Anatolia Project retrospectively for 28, and TL 4.1 billion was transferred for 29. As part of measures to reduce unemployment, an adjustment was made to the provisions of Article 5 by the Law No. 5921, which provides that insurance premiums of those beneficiaries of unemployment benefits who are recruited under the for the insured recorded in premium and service documents submitted to SGK within the three-month period preceding the date of recruitment by December 31, 29. Article 3 of the Law empowers the Undersecretariat of Treasury to cover part of insurance premiums, up to a hundred percent of employer s shares, for employment to be achieved subject to investments encouraged under resolutions on public assistance in investments. Council of Ministers has been authorised to Selected Unemployment Insurance Statistics 35, People Claiming Unemployment Insurance People Receiving Regular Unemployment Insurance Benefits Amount of Unemployment Insurance Benefits Paid 12 3, 1 Number of People 25, 2, 15, 1, 5, TL Million Source: Compiled from Unemployment Insurance Fund Bulletins. principles laid down by the Law should be covered partially by the unemployment fund for unclaimed unemployment periods. This implementation took effect on October 1, 29. Moreover, the same law provides that employer s shares of insurance premiums (calculated taking the lower limit of earnings as basis for premiums) of those who were recruited and had been actively working in addition to the insured reported in premium and service documents of April 29 shall be covered from the unemployment insurance fund for six months, except adjust the duration of implementation, coverage ratio and scope of the amount to be covered by the Treasury, based on the sector, size and location of the investment. The Council of Ministers, in their resolution no. 29/15199, decided that for large-scale investments as well as investments supported on regional basis, employer s share of insurance premiums to be paid for employees employed additionally shall be covered by the Treasury for 2 to 7 years depending on the region of investments. Law No of February 18, 29 extended the duration foreseen for short-time working from 3 to 6 months, exclusively for applications made for short-time working in 28 and 29, raised the short-time working allowance by 5%, and provides that payments made as short working payments shall not be deducted from the duration of unemployment allowance determined at the beginning.

17 Individual Pension System 29 Progress Report 15

18

19 2 Individual Pension System Data 2.1 General Overview 2.2 Contracts 2.3 Participants 2.4 Contributions 2.5 Pensioners 2.6 Intermediares and e-beas 2.7 Pension Plans

20 18 Individual Pension System 29 Progress Report INDIVIDUAL PENSION SYSTEM DATA 2.1 General Overview 29 Year-end Participants 1,987,94 Funds (mio ) 4,211 Intermediaries 15,666 Pension Companies 13 As of the end of 29, 2,23,886 contracts are in force. The number of participants has grown around 14% with respect to last year, approaching 2 million. Accumulated funds have grown by 43%, exceeding 4.2 billion, and number of pension companies reached 13 with Deniz Emeklilik ve Hayat A.Ş. commencing this year. Moreover, number of retirees increased rapidly and around 29 million has been paid as pensions. Number Development of Number of Contracts and Amount of Contributions 2,4, 2,3, 2,2, 2,1, 2,, 1,9, Total Amount of Contributions (TL Million) Number of Contracts G1 7,25 7, 6,75 6,5 6,25 6, 5,75 5,5 5, TL Million Comparison of Total Invested Amount and Accumulations 9,5 Accumulations of Participants (TL) 9, Total Invested Amount (TL) 8,5 G2 8, TL Million 7,5 7, 6,5 6, 5,5 5, Total amount of invested contributions and total accumulations in 29 are compared. Amount of contributions invested (TL 6,869,992,691) until December 31, 29 reached TL 9,97,436,467 (Return rate should be interpreted together with the internal rate of return on investments. Direct comparison with other investment instruments may not give accurate results.)

21 Individual Pension System 29 Progress Report 19 Development of Pension Funds of Participants (TL) G3 Aegon Emeklilik ve Hayat A.Ş. Allianz Hayat ve Emeklilik A.Ş. Anadolu Hayat Emeklilik A.Ş. Avivasa Emeklilik ve Hayat A.Ş. Deniz Emeklilik ve Hayat A.Ş. Ergoİsviçre Emeklilik ve Hayat A.Ş. Finans Emeklilik ve Hayat A.Ş. Fortis Emeklilik ve Hayat A.Ş. Garanti Emeklilik ve Hayat A.Ş. Groupama Emeklilik A.Ş. Ing Emeklilik A.Ş. Vakıf Emeklilik A.Ş. Yapı Kredi Emeklilik A.Ş. 2, 1,8 1,6 1,4 1,2 1, Total Fund Amount of Participants (TL Million) Development of Total Amount of Funds invested by the pension companies, in 29. Funds controlled by Deniz Emeklilik ve Hayat A.Ş. (TL 11,874,815), Ergoİsviçre Emeklilik ve Hayat A.Ş. (TL 14,42,74) and Finans Emeklilik ve Hayat A.Ş. (TL 16,942,825) can not be followed in the graph due to the small amounts. Distribution of Contributions according to Contracts Establishment Reason (TL) G4 New Entry to the System 6,745,418,37 95.% Transfer of Accumulations in Life Insurance to the Individual Pension System 343,954, % Transfer of Accumulations in Provident Funds to the Individual Pension System* 12,635,368.2% As of 29 year-end, distribution of total amount of contributions for the contracts in force is analyzed according to establishment reason of the contracts. 5 percent of the contributions entered the system through Transfer of Accumulations in Life Insurance to the Individual Pension System. While TL 28,195,361 of this amount was transferred at establishment of a new contract, the remaining amount is transferred to existing pension contracts. * These include funds from associations, foundations, provident funds and other organizations with retirement provisions.

22 2 Individual Pension System 29 Progress Report INDIVIDUAL PENSION SYSTEM DATA Distribution of Payments (TL) G5 Total Amount of Contributions Invested 6,869,992, % Entrance Fee (Paid) 76,526, % Administrative Expenses Fee 232,14,87 3.2% Until the end of 29, TL 6,869,992,691 has been invested after deduction of TL 232,14,87 for administrative expenses fee from TL 7,12,7,561, the total amount collected from contracts in force. Apart from contributions, an amount of TL 76,526,863 was paid as entrance fee for contracts in force. Distribution of Contracts in Force and Terminated G6-7 In Force TL 7,12,7,561 7% In Force 2,23,886 66% Terminated 1,124,528 34% Terminated TL 3,1,726,271 3% All contracts written as of 29 year-end are classified as in force and terminated. The total contribution amount of TL 1,22,733,832 for all the contracts written as of 29 year-end are analyzed in terms of enforcement. 2.2 Contracts Distribution of contracts that are in force as of 29 year-end are shown in the following graphs, according to their various properties. Distribution of Contracts and Accumulations according to Contract Types G8-9 Individual Pension Contracts 1,717, % Group Individual Contracts 414, % Individual Pension Contracts 7,79,2, % Group Individual Contracts 1,694,358, % Noncontributory Group Contracts 72, % Noncontributory Group Contracts 324,57,26 3.6% Distribution of contracts in force according to their types as of 29 year-end. Distribution of the total amount of accumulations for contracts in force according to contract types as of 29 year-end.

23 Individual Pension System 29 Progress Report 21 Distribution of Contracts according to Regions 5 Ratio of Contracts as of 29 Year-end (%) Ratio of Total Amount of Contributions as of 29 Year-end (%) G1 4 Ratio (%) Marmara Central Anatolia Aegean The Mediterranean The Black Sea Southeast Anatolia East Anatolia Region Distribution of contracts in force as of 29 year-end is analyzed according to Regions. The data about Regions for the contracts are gathered according to the provinces where the participants reside. 9,746 contracts with participants living abroad are not shown on the graph. Vesting Years G11 Distribution of Contracts according to Payment Period G12 1 year 1.% 2 years.5% Immediate Vesting 4.1% 3 years 23.6% 4 years 7.3% 5 years 27.4% As of 29 year-end, noncontributory group contracts in force are analyzed according to their vesting years (waiting period for deserving the total amount of contributions paid by sponsor companies and their profit). Monthly 2,33,477 92% Quarterly 8,365 4% Semiannual 2,62 1% Annual 69,982 3% Distribution of contracts in force as of 29 year-end are analyzed according to Payment Period. Approximately Yenisi 3.5% of the participants save by means Yazı of rengi their employees. Of the TL 324 million accumulation, 4% enjoy immediate vesting. 27% of participants are entitled to the employer contributions in 5 years.

24 22 Individual Pension System 29 Progress Report INDIVIDUAL PENSION SYSTEM DATA Distribution of Terminated Contracts according to Reason (Number) G13 Distribution of 1,124,528 terminated contracts out of 3,328,414 that were written until the end of 29, according to Termination Reasons. The ratio of terminated contracts to the written contracts is 33.8 percent. 4.2 percent of this ratio is Transfer of Pension Account to Another Pension Company and Consolidation of Contracts,.9 percent is Cancellation by Company,.2 is other involuntary reasons (retirement, death, disability). The termination ratio of voluntary opt outs of contracts entered the system with new contract establishment is 28.5 percent. Opt Outs 948, % Transfer of Pension Account to another Pension Company 118, % Consolidation of Contracts 2, % Cancellation by Company 3, % Death/Disability 4,39.36% Retirement 2,29.18% Distribution of Contracts in Force and Terminated G14 7, Terminated In Force 6, Number of Contracts 5, 4, 3, 2, 1, All contracts that came in force in the corresponding year are analyzed according to status of being in force or terminated, as of 29 year-end. Terminations include cancellations by company, death/disability, transfer of pension account to another pension company, merging of contracts, retirement and voluntary opt outs.

25 Individual Pension System 29 Progress Report 23 Distribution of Accumulations according to Contracts Age (TL) G15 Accumulations of Participants (TL Million) 2,5 2, 1,5 1, 5 Less Than 1 Year 1 Year 2 Years 3 Years 4 Years 5 Years 6 Years Elapsed Time in the Individual Pension System As of 29 year-end, distribution of total accumulations (TL 9,97,436,467) for the contracts in force is analyzed according to the completed age of the contracts. Distribution of Contracts according to Contracts Age G16 6, 5, Number of Contracts 4, 3, 2, 1, Less Than 1 Year 1 Year 2 Years 3 Years 4 Years 5 Years 6 Years Elapsed Time in IPS As of 29 year-end, contracts in force is analyzed according to their completed age in the system. Average age of the contracts in force as of 29 year-end is calculated to be 1.8 years.

26 24 Individual Pension System 29 Progress Report INDIVIDUAL PENSION SYSTEM DATA Termination Ratio of Contracts according to the Month of Enforcement (%) G17 Termination Ratio (%) Termination Ratio (%) Number of Contracts Number of Contracts Entered the System (Thousand) Month Number of contracts entered the system in the specified month with a new contract establishment and the ratio of voluntary withdrawals as of 29 year-end. Distribution of Contracts Terminated Voluntarily according to their Age at Termination 45 G18 4 Number of Contracts (Thousand) Age of Contract at Termination (Months) Distribution of contracts, entered the system with a new contract establishment and terminated voluntarily, according to their age at termination, as of 29 year-end. Age of the contract shows the number of full months from the date of coming in force until termination.

27 Individual Pension System 29 Progress Report 25 Distribution of Contracts Transferred to Another Pension Company G19 35, Number of Contracts Transferred 3, 25, 2, 15, 1, 5, [-1) [1-2.5) [2.5-5) [5-7.5) [7.5-1) [1-15) [15-2) [2-25) [25-5) [5-1) [1-25) [25 +) Transfer Amount Interval (TL Thousand) Usage of Account Merging Right (Number) G2 3, Same Company Different Company 2,5 Number of Contracts 2, 1,5 1, The right to transfer the contract to another company after one year, has been used ca. 114 thousand times since the commencement of the system. Date of Merge Distribution of merged contracts in the same or different companies is analyzed as of 29 year-end, according to the date they merged.

28 Yaş 26 Individual Pension System 29 Progress Report INDIVIDUAL PENSION SYSTEM DATA 2.3 Participants Distribution of Participants according to Gender and Ages G21 Male Population Outside of IPS Male Population Within IPS Female Population Outside of IPS Female Population Within IPS Age Population (Thousand) Distribution of participants of contracts in force in the population as of 29 year-end, according to their Gender and Ages. Population of Turkey is taken from the results of Address Based Population Registration System, year 29. The penetration rate of IPS to the age general population is 4.73 percent. Average age of population within IPS is 36. in female and 36.4 in male participants. Gender and Education Distribution G22-23 Other- Undefined 32.5% Male 1,197,435 6% Female 79,55 4% Master's Degree 2.4% University- Bachelor's Degree 26.9% Primary- Secondary School 14.% High School 23.6% Vocational Schools- Associate Degree.5% Distribution of participants of contracts in force as of 29 yearend according to their Gender. Distribution of participants of the contracts in force as of 29 year-end according to their Level of Education.

29 Individual Pension System 29 Progress Report 27 Participants Fund Group Preferences according to Age Groups (%) G24 Gov't Bonds and Bills (TL) Flexible Stocks International Liquid Balanced Gov't Bonds and Bills (FX) 56 and over Participants' Age Groups Age Age Age and under Distribution of the accumulations (TL 9,97,436,467) for the contracts in force, analyzed in terms of Participants Age Groups and Fund Groups as of 29 year-end. Participants Fund Preferences per Fund Group (Number) G25 Gov't Bonds and Bills (TL) Liquid Flexible Balanced Stocks Gov't Bonds and Bills (FX) International 25, 5, 75, 1,, 1,25, 1,5, 1,75, 2,, 2,25, Ratio (%) Number of Contracts Participants fund preferences are shown based on the fund groups. On average, 2.45 fund types were bought per contract. As of December 31, 29 flexible fund group has 24 percent stocks, 56 percent gov t bonds and bills and 13 percent reverse repo in its portfolio. Balanced fund group has 31 percent stocks, 54 percent gov t bonds and bills and 8 percent reverse repo in its portfolio.

30 28 Individual Pension System 29 Progress Report INDIVIDUAL PENSION SYSTEM DATA Participants Fund Preferences according to Contract Types per Fund Group G26 Gov't Bonds and Bills (TL) Liquid Flexible Balanced Stocks Gov't Bonds and Bills (FX) International Type of Contract Noncontributory Group Contracts Group Individual Contracts Individual Pension Contracts Ratio (%) Participants fund preferences according to contract types are shown based on the fund groups. As of 29 year-end accumulations amount of noncontributory group contracts is TL 324 million, group individual group contracts is TL 1,694 million and individual pension contracts is TL 7,79 million. On average, in noncontributory group contracts 2.96, in group individual group contracts 2.37 and in individual pension contracts 2.48 fund groups were bought per contract. Accumulations of Participants according to Ages (TL) G27 12, 1, Average amount of Accumulations First and Third Quarters and Median Accumulations Accumulation Amount (TL) 8, 6, 4, 2, Age of Participant Accumulation amounts of participants in contracts that are still in force as of 29 year-end are analyzed according to participants age.

31 Individual Pension System 29 Progress Report 29 Participants Average Monthly Regular Contribution Planning to be Paid according to Age Groups G28 25 and under Age Age Age and over 25 Average Monthly Regular Contribution (TL) As of 29 year-end, the average monthly regular contributions planning to be paid for contracts in force are analyzed in terms of Participants Age Groups. The average monthly regular contribution planning to be paid for contracts in force as of 29 year-end is TL 137 and average monthly regular contribution paid in 29 is TL 148. The area of the bubble is proportional to number of contracts in force as of 29 year-end. Ratio of Participants to the Population according to Provinces (%) G29 Edirne İzmir Kırkareli Tekirdağ Çanakkale Balıkesir Manisa Aydın Muğla İstanbul Yalova Bursa Kütahya Uşak Denizli Kocaeli Düzce Sakarya Bolu Bilecik Burdur Afyon Eskişehir Isparta Antalya Bartın Zonguldak Karabük Ankara Konya Çankırı Kastamonu Kırıkkale Karaman Kırşehir Aksaray Mersin Çorum Sinop Nevşehir Niğde Yozgat Adana Samsun Amasya Kayseri Tokat Ordu Sivas Kahramanmaraş Osmaniye Gaziantep Kilis Trabzon Giresun Gümüşhane Bayburt Malatya Adıyaman Erzincan Tunceli Elazığ Şanlıurfa Rize Bingöl Artvin Erzurum Muş Bitlis Diyarbakır Siirt Batman Mardin Ardahan Kars Ağrı Şırnak Iğdır Van Hakkari Hatay % % % %. - 1.% Ratio of number of participants of contracts in force as of 29 year-end to the general population between ages in their home city is depicted in the map.

32 3 Individual Pension System 29 Progress Report INDIVIDUAL PENSION SYSTEM DATA Distribution of Participants according to Regions and Age Groups (%) G3 East Anatolia 25 and under Age Age Age and over Southeast Anatolia The Black Sea The Mediterranean Aegean Central Anatolia Marmara Ratio of Participants (%) Distribution of participants of contracts in force are analyzed according to Regions and Age Groups as of 29 yearend. The data about Regions are gathered according to the provinces where the participants reside. 9,65 participants who are living abroad are not shown on the graph. Distribution of Participants and Accumulations according to Income Levels (%) G GMW < Income 3GMW 6.1% 3GMW < Income 6GMW 3.9% 6GMW < Income 1GMW 9.8% 2GMW < Income 3GMW 59.% 3GMW < Income 6GMW 2.2% 6GMW < Income 1GMW 9.9% 1GMW < Income 5.4% 1GMW < Income 13.2% Income AGMW.9% Income GMW.1% GMW < Income 2GMW 19.9% GMW < Income 2GMW 15.6% GMW = Monthly Gross Minimum Wage Distribution of participants of contracts in force according to their Level of Income as of 29 year-end. Distribution of fund amount of contracts in force according to Participants Level of Income as of 29 year-end. Analysis includes data of 18.9 percent of the participants whose income data are available. Income indicates the Net Income declared by the participant at the signing of the contract.

33 Individual Pension System 29 Progress Report 31 Distribution of Participants according to Number of Contracts Owned (%) G33 1 Contract 84.2% 2 Contracts 12.4% 3 or More Contracts 3.4% Distribution of participants according to number of contracts they hold as of 29 year-end percent of participants have only one contract in the system, while 12.4 percent have two contracts and 3.4 percent have at least three contracts. Distribution of Participants according to Contract Types (%) G34 Individual Pension Contracts 78.27% 1.8%.31% %,31.8% 3.4%.6% 15.89% Group Individual Contracts Noncontributory Group Contracts Distribution of participants according to type of contracts they own as of 29 year-end. Areas of intersection refer to participants who have more than one type of contract percent of participants have only individual pension contracts, while participants with only group individual contract is 15.9 percent and participants with only noncontributory group contracts are.6 percent..31 percent of participants have all three types of contracts. 83 percent (3.35%/4.4%) of participants with noncontributory group contracts also have group individual contracts, while 15 percent (.6%/4.4%) have only noncontributory group contracts. 83% of the employees saving through employer plans also save in their group individual contracts.

34 32 Individual Pension System 29 Progress Report INDIVIDUAL PENSION SYSTEM DATA 2.4 Contributions Distribution of Contributions according to Distribution Channel (%) G35 Individual Direct Sales Corporate Sales Agent Bank Other Total Amount of Contributions (%) Distribution of the total amount of contributions (TL 1,22,733,832) paid to companies as of 29 year-end in terms of Distribution Channel is comparatively analyzed according to the contribution payment year. Others include Call Center and Broker channels. Distribution of Contributions according to Distribution Channel and Payment Period (%) G36 Monthly Quarterly Semiannual Annual Individual Direct Sales Corporate Sales Agent Bank Other Contributions (%) Distribution of the total amount of contributions (TL 7,12,7,561) for the contracts in force as of 29 year-end in terms of Payment Period, in the detail of Distribution Channel. Others include Call Center and Broker channels. Contracts with monthly payment period are providing 82 percent of all contributions.

35 Individual Pension System 29 Progress Report 33 Cumulative Change in Contributions According to Contribution Type (TL Million) G37 1, 9, Additional Contribution Initial Contribution (Transfer of Accumulations from Outer Systems*) Initial Contribution (New Entry to System) Regular Contribution 8, 7, 6, 5, 4, 3, 2, 1, Amount (TL Million) Month Distribution of contributions paid to system are analyzed according to Contribution Type as of 29 year-end. * Transfer of accumulations from outer systems includes transfer of accumulations in life insurance and in provident funds to the individual pension system. Provident funds include funds from associations, foundations and other organizations with retirement provisions. Average Monthly Regular Contribution according to Geographical Regions G38 Average Monthly Regular Contribution Paid (TL) Average Monthly Regular Contribution Paid (TL) in 28 Marmara Central Anatolia Aegean Average Monthly Regular Contribution Paid (TL) in 29 The Mediterranean The Black Sea Ratio of Contracts as of 29 Year-end (%) Southeast Anatolia East Anatolia Ratio of Contracts as of 29 Year-end (%) Region The average monthly regular contributions paid for the contracts in force according to Regions are analyzed as of 29 yearend and compared to the previous year. The data about Regions for the contracts are established according to the provinces where the participants reside. The average monthly regular contribution paid for contracts in force as of 29 yearend is observed to be TL 148 in 29 and TL 133 in 28. In addition to the ones analyzed, there are 9,746 contracts with participants living abroad.

36 34 Individual Pension System 29 Progress Report INDIVIDUAL PENSION SYSTEM DATA Average Monthly Regular Contribution according to Payment Period G39 Average Monthly Regular Contribution (TL) Average Monthly Regular Contribution Paid (TL) in 28 Monthly Quarterly Semiannual Annual Payment Period Average Monthly Regular Contribution Paid (TL) in 29 The average monthly regular contributions paid for the contracts in force according to Payment Period are analyzed as of 29 year-end. An analysis of the current payment periods of contracts as of 29 year-end indicates that 92 percent preferred monthly, 4 percent preferred quarterly, 1 percent preferred semiannual and 3 percent preferred annual payment periods. The average monthly regular contribution paid for contracts that preferred monthly payment period and in force as of 29 year-end is observed to be TL 141 in 29 and TL 129 in 28. Average Monthly Regular Contribution according to Distribution Channel G4 Average Monthly Regular Contribution Paid in 29 (TL) Ratio of Contributions as of 29 Year-end (%) 18 7 Average Monthly Regular Contribution Paid in 29 (TL) Ratio of Contributions as of 29 Year-end (%) Individual Direct Sales Corporate Sales Agent Bank Other The average monthly regular contributions paid for the contracts in force according to Distribution Channel are analyzed as of 29 year-end. Others include Call Center and Broker channels. For Individual Direct Sales contracts that are in force as of 29 year-end, which account for 64 percent of all contributions, average monthly regular contribution paid is observed to be TL 15 in 29 and TL 135 in 28.

37 Individual Pension System 29 Progress Report 35 Distribution of Contributions according to Average Monthly Regular Contribution Intervals (TL) G ,246,816, % ,919, % ,81,41, % ,885,216, % ,51,644, % Distribution of paid contributions of contracts in force (TL 7,12,7,561) is analyzed according to contracts prevailing Average Monthly Regular Contribution Interval planning to be paid as of 29 year-end. Distribution of Contributions according to Payment Instrument (%) G42 Credit Card 54% Bank Transfer/ Cash 21% Distribution of the total amount of contributions paid in 29 for the contracts in force as of 29 year-end in terms of Payment Instrument. Analysis includes data of 97.7 percent of the contributions paid in 29 whose Payment Instrument data are available. Cheque/Postal Cheque contributions are not shown on the graph because the amount is too small. Automatic Payment 25%

38 36 Individual Pension System 29 Progress Report INDIVIDUAL PENSION SYSTEM DATA Change in Average Annual Regular Contribution (TL) G43 1,2 24 Average contribution escalated by mid-year inflation rates. Average Annual Regular Contribution (TL) 1, Annual regular contributions paid by participants for contracts that are in force as of corresponding year-end. Change in Administrative Expenses Fee Ratio (%) G44 6. Ratio of Administrative Expenses Fee in the Related Month (%) Ratio of Cumulative Administrative Expenses Fee (%) Fee/Nontransferred Payments (%) Month The graph shows the administrative expenses fee for contracts, deducted off all the payments except the transferred amounts as of 29 year-end. Ratio of cumulative administrative expenses fee is calculated as 3.99 percent as of 29 year-end.

39 Individual Pension System 29 Progress Report 37 Cumulative Change in Fees According to Fee Types G45 42% 1,2 Administrative Expenses Fee Entrance Fee (Paid at Termination) 38% 32% 14% 1% 12% Amount (TL Million) 1, Entrance Fee (Paid at Entrance) Fund Management Fee Administrative Expenses Fee 3% 41% 2% 8% 1% 35% 38% 16% 1% 1% 34% 12% 1% 14% Month Distribution of fees (TL 1,82,518,489) deducted from contracts are analyzed according to Fee Type as of 29 year-end. Other fees, which amount to TL 533,991 as of December 31st, 29, are not shown on the graph. The pie charts illustrate cumulative distribution of fee types as of year-ends.

40 38 Individual Pension System 29 Progress Report INDIVIDUAL PENSION SYSTEM DATA Cumulative Amount of Withholding Tax G46 Amount of Withholding Tax (TL Million) Month Cumulative change in amount of withholding tax of voluntarily opted out contracts are analyzed, as of 29 year-end. Change in Contributions Paid for Contracts in Force according to Years Total Amount of Contributions (TL Million) 3, 2,5 2, 1,5 1, 5 Total amount of contributions for the relevant year escalated by mid-year inflation rates to 29. G Total amount of contributions paid for contracts that are in force as of 29 year-end are analyzed according to payment years. Contributions paid during the years are escalated by mid-year inflation rates until 29.

41 Individual Pension System 29 Progress Report 39 Distribution of Contracts according to Payment Ability (%) G Average Ratio (%) [,6) [6,12) [12,18) [18,24) [24,3) [3,36) [36,42) [42,48) [48,54) [54,6) [6,66) [66,72) [72,78) Average Age of the Contract (Month) Participants, that entered the system in or before October, 29 and preferred monthly payment period, paid at least one months regular payment but skipped at least three months contrubution and are still in the system are analyzed according to contracts age. While calculating the payment ability, period (months) from the last contribution to December 31st, 29, were taken into consideration.

42 4 Individual Pension System 29 Progress Report INDIVIDUAL PENSION SYSTEM DATA 2.5 Pensioners Change in Number of Retired Participants G49 2, Number of Retired Participants 1,8 1,6 1,4 1,2 1, Development of Number of Retired Participants as of 29 year-end. Retired participants include participants, who used retirement right but preferred to stay in the system after retirement and took programmed withdrawal together with the participants who opted out the system as retired and took a lump sum payment. Development of Participants according to Date they can Retire G5 9, Eligible for Retirement in the Related Month Total Number Eligible (Cumulative) 35, Number of Participants Eligible for Retirement 8, 7, 6, 5, 4, 3, 2, 1, 3, 25, 2, 15, 1, 5, Total Number Eligible Participants of contracts in force as of 29 year-end, who were eligible for retirement but not retired yet and who will be eligible until the end of 219 are analyzed, according to date they can retire.

43 Individual Pension System 29 Progress Report 41 Retirement in IPS Until , 1,99 participants have exercised their right of retirement and are entitled to access their accumulation as programmed or lump sum withdrawal. These participants comprise approximately 56% of all entitled to retirement. 44% of participants entitled to retirement chose not to exercise their right and they continue to save in the individual pension system. As set by the regulation, retirement from the individual pension system requires turning the age of 56 and having contributed in the system for 1 years. The first retirees comprise individuals, who transferred their funds from life insurance or provident funds, associations, foundations or other organizations with retirement provisions. Contributions either transferred from outside systems or paid in the individual pension system total to TL 46.5 million, and within the approximately 3-year period these contributions stayed in the system, they have appreciated 35% after-tax, totaling to TL 62.9 million. When pension payments to individuals are considered, mean accumulation is approximately TL 33, and the median around TL 21,5, while 75% of pensioners received TL 15,6 or more. G51 Amount (TL Million) Total Amount Paid to Retired First and Third Quarters and Median of Amount Paid to Retired Amount (TL Thousand) Date of Payment Ratio of Participants Staying in the System After Retirement G52 Exercised their Retirement Option 56% Staying in the System after Eligibility 44% Distribution of participants of contracts in force as of 29 year-end according to the Usage of Retirement Right. Retired participants include participants, who used retirement right but preferred to stay in the system after retirement and took programmed withdrawal together with the participants who opted out the system as retired and took a lump sum payment.

44 42 Individual Pension System 29 Progress Report INDIVIDUAL PENSION SYSTEM DATA Contributions and Net Returns of Retired Participants (TL) G53 6 Net Amount of Return from the System Total Contributions Paid 5 Amount (TL Million) Year of Retirement Contributions and net amount of return of participants, who have opted out from the system as retired as of 29 year-end, are analyzed. Of the participants who are qualified for retirement, 56 retired in 27, 312 retired in 28 and 1,539 retired in 29 and took their accumulations. Retired Participants according to Withdrawal Amount G54 Total Amount Paid to Retired (TL Million) Total Amounts Paid to Retired (TL) Number of Retired Participants 1,2 1, Number of Retired Participants [,25) [25,5) [5,75) [75,1) [1,25) [25,1,2] Retirement Payment Intervals (TL Thousand) Distribution of retired as of 29 year-end according to the Total Amount Paid to Retired. Retired participants include participants, who used retirement right but preferred to stay in the system after retirement and took programmed withdrawals together with the participants who opted out the system as retired and took a lump sum payment.

45 Individual Pension System 29 Progress Report 43 Distribution of Retired Participants according to Time Spent in the Individual Pension System G55 Number of Participants Month in IPS Distribution of retired participants, who have opted out of the individual pension system (IPS) or prefered to stay in the system and took programmed withdrawals, according to time spent in the individual pension system. Even if the participant has transferred accumulations in life insurance or provident funds to the system and has fulfilled the conditions for retirement, she must also stay in the system for at least 36 months. The calculation of this period starts from the date of the first transfer. Provident funds include funds from associations, foundations and other organizations with retirement provisions.

46 44 Individual Pension System 29 Progress Report INDIVIDUAL PENSION SYSTEM DATA 2.6 Intermediaries and e-beas To be licensed as an individual pension intermediary, candidates need to take and pass the Individual Pension Intermediaries Exam (e-beas), which examines the candidates professional knowledge and skills. It is executed as multiple choice, carried out electronically over the internet. Each candidate is asked a unique and randomly selected set of 1 questions taken out of a question pool that is periodically updated according to legislative and economic changes. Candidates need to have 65 or more correct answers to pass the exam. As prescribed in the regulation about Individual Pension Intermediaries dated August 29, 29, candidates answer questions in the following topics: Basic Business and Economics, Social Security System, Finance and Financial Instruments, Legislation of General and Life Insurance, Knowledge of Fundamental Human Relations and Marketing, Legislation of Individual Pension System and Relevant Tax Laws. Contracts according to Distribution Channel G56 Individual Direct Sales 1,426, % Corporate Sales 155,18 7.% Agent 227, % Bank 371, % Ratio of 2,23,886 contracts in force according to Distribution Channel as of 29 year-end. Others include Call Center and Broker channels. Others 23,79 1.% Ratio of Contracts and Contributions according to Distribution Channel (%) G57 7 Ratio of Intermediaries (%) Ratio of Contracts (%) Ratio of Contributions (%) 6 5 Ratio (%) Individual Direct Sales Corporate Sales Agent Bank Others Ratio of Intermediaries, Contracts and Contributions for contracts in force according to Distribution Channel as of 29 yearend. Others include Call Center and Broker channels.

47 Individual Pension System 29 Progress Report 45 Ratio of Contracts and Contributions according to Age Groups of Intermediaries (%) G58 5 Ratio of Intermediaries (%) Ratio of Contracts (%) Ratio of Contributions (%) 4 Ratio (%) Age Age 26-3 Age Age 36-4 Age and over Intermediaries Age Groups Ratio of Intermediaries, Contracts and Contributions for contracts in force according to Intermediaries Age Groups as of 29 year-end. Ratio of Contracts and Terminated Contracts according to Age Groups of Intermediaries (%) G59 5 Ratio of Contracts (%) Termination Ratio of Contracts (%) 4 Ratio of Contracts (%) Termination Ratio of Contracts (%) Age Age 26-3 Age Age 36-4 Age and over Intermediaries' Age Groups Analysis of Ratio of Contracts that are still in force, and Terminated Contracts according to Age Groups of Intermediaries as of 29 year-end.

48 46 Individual Pension System 29 Progress Report INDIVIDUAL PENSION SYSTEM DATA Distribution of e-beas Takers according to Distribution Channel G6 Individual Direct Sales Agent Bank Independent Applications Other 12,5 1, Number of Candidates 7,5 5, 2, e-beas Taking Year Analysis of 44,72 candidates who took e-beas until the end of 29 according to Distribution Channel. Others include Corporate Sales, Call Center and Broker channels. Distribution of e-beas Takers and Success Rate according to Age Groups G61 2, 17,5 15, Number of Candidates Number of Successful Candidates Number 12,5 1, 7,5 5, 2,5 2 and under Age Age 26-3 Age Age 36-4 Age and Intermediaries' Age Groups over 44,72 e-beas takers and 26,47 successful ones until the end of 29, have been analyzed according to Age Groups during exam date.

49 Individual Pension System 29 Progress Report 47 Distribution of e-beas Takers Grades according to Distribution Channel (%) 18 Individual Direct Sales Agent Bank G62 16 Ratio of e-beas Takers (%) Grade Interval A group of 41,9 e-beas takers whose Distribution Channel was Individual Direct Sales, Agent or Bank during exam date were analyzed according to Grade Intervals. Beside these channels, 2,82 candidates from other distribution channels received an average grade of 62 on e-beas. The Progress of e-beas Takers Success Ratio 9 Ratio of Success (%) Number of Candidates 5, G63 Ratio of Success (%) 45, 4, 35, 3, 25, 2, 15, 1, 5, Number of Candidates Month The progress of cumulative success ratio of e-beas takers until the end of 29 has been analyzed. Cumulative success ratio is observed to be percent as of 29 year-end.

50 48 Individual Pension System 29 Progress Report INDIVIDUAL PENSION SYSTEM DATA 2.7 Pension Plans Company Name Plan No Plan Name Total Contributions (TL) Number of Contracts Aegon Emeklilik ve Hayat A.Ş. Allianz Hayat ve Emeklilik A.Ş. 2 Individual Pension Plan - 2 1,65,38 11,865 3 Small and Medium Size Enterprises Group Pension Plan 3,93,312 1, Individual Security Pension Plan 24,689,563 23,47 2 Police Organization Individual Security Pension Plan 5,388,23 5,376 3 Gov t Bonds and Bills Plan 22,581,693 6,955 8 Çilek Plan 19,118,461 6,876 9 Kiraz Plan 46,425,284 8,25 12 Group Pension Plan ,524,541 12,769 1 Future Pension Plan 53,485,23 138,64 21 Standard Group Pension Plan ,18,265 7,331 Anadolu Hayat Emeklilik A.Ş. 44 Standard Group Pension Plan ,674,261 6, Pension Plan For Switchovers From Life Insurance 195,661,415 1, Housewives Pension Plan 231,275, , Standard Group Pension Plans ,469,964 18,426 1 Standard Group Pension Plans ,66,254 8, Standard Group Pension Plan ,74,616 18, Tomorrows Pension Plan 144,773,652 65, New Life Pension Plan 24,34,746 15, Housewives Tomorrows Pension Plan 6,456,35 8, Pension Plan ,21,514 11,641 1 Security Plan ,791,485 13,772 2 Security Plan ,681,729 14,847 4 Group Pension Plan ,313,175 23,46 Avivasa Emeklilik ve Hayat A.Ş. 5 Group Pension Plan ,565,297 11,649 7 Group Pension Plan ,,145 8,348 8 Group Pension Plan - 8 6,574,621 11, Individual Security Plan ,397,76 15, Group Plan ,447,994 12,27 2 Security Plan ,783,77 58, Individual Security Plan ,784, , Altın Pension Plan 24,594,132 5, Elmas Pension Plan 75,86,375 11,63 18 Individual Security Plan ,996,345 24, Individual Security Plan ,738,674 9,117 ER* Fİ* Fortis Emeklilik ve Hayat A.Ş. GR* 11 Ergonomik Individual Pension Plan 11,425,433 1,73 1 A Individual Pension Plan 1,771,64 6,634 2 B Individual Pension Plan 9,738,529 11,251 2 Mostly FX Invested Composite Individual Pension Plan 26,48,253 6,489 3 Income Oriented TL Instruments Individual Pension Plan 133,539,713 49,36 4 Growth Oriented TL Instruments Individual Pension Plan 59,317,125 15,575 5 Flexible Individual Pension Plan 19,41,563 5,77 1 Exclusive Pension Plan 318,9,587 63,46 23 Synergy Pension Plan ,371,526 9,755 * Fİ: Finans Emeklilik ve Hayat A.Ş., ER: Ergoİsviçre Emeklilik ve Hayat A.Ş., GR: Groupama Emeklilik A.Ş.

51 Individual Pension System 29 Progress Report 49 Company Name Plan No Plan Name Total Contributions (TL) Number of Contracts 1 Regular Investment Pension Plan 84,797,16 22,19 4 Balanced Professional Investment Pension Plan 37,92,865 5,152 7 Group Pension Plan ,72,894 14,15 15 Practical Individual Pension Plan ,768,989 75, Mixed Individual Pension Plan ,114,854 18,2 Garanti Emeklilik ve Hayat A.Ş. 36 Practical Individual Pension Plan ,694,78 14, Mixed Individual Pension Plan ,337,28 11, Individual Corporate Pension Plan ,989,815 8,32 91 Individual Corporate Pension Plan ,571,629 6, Individual Corporate Pension Plan ,683,982 7, Individual Corporate Pension Plan ,861,556 7, FX Indexed Ind. Corporate Pension Plan With Entrance Fee ,891,984 5, Employee s Group Pension Plan ,849,16 6, Individual Pension Plan ,317,3 39, Individual Pension Plan ,46,723 11, Individual Pension Plan ,562,59 5,55 16 Individual Pension Plan ,51,543 17, Employee s Group Pension Plan ,249,213 8, Employee s Group Pension Plan ,255,781 7,885 Ing Emeklilik A.Ş. Vakıf Emeklilik A.Ş. 6 Group Pension Plan ,688,83 6, Individual Pension Plan ,796,257 95,71 13 Group Pension Plan ,193,544 1,87 28 Individual Pension Plan ,581,184 24, Noncontributory Group Pension Plan ,675,311 6,153 5 Ing Emeklilik Orange Pension Plan 3,32,3 9,738 1 Bahar Güneşi 13,33,83 5,261 9 Group Pension Plan ,73,768 13,563 1 Vakıf Emeklilik Individual Pension Plan - 1 1,442,13 46, Vakıf Emeklilik Individual Pension Plan ,57,592 6,73 13 Vakıf Emeklilik Individual Pension Plan ,33,164 22, Vakıf Emeklilik Group Pension Plan ,471,84 15,31 1 Standard (USD Indexed) Pension Plan 12,373,285 14,84 2 Standard (TL Indexed) Pension Plan 13,337,77 59,783 Yapı Kredi Emeklilik A.Ş. 3 Standard (USD Indexed) Pension Plan For Switchovers 49,962,439 1,31 4 Exclusive (USD Indexed) Pension Plan 69,59,462 17,226 6 Exclusive (TL Indexed) Pension Plan 19,1,236 34, Noncontributory Group Pension Plan ,736,961 1, Employee s Group Pension Plan ,794,518 14, Standard Pension Plan ,788,125 17, Exclusive Pension Plan ,59,14 11,52 56 Standard Pension Plan ,131,425 27, Exclusive Pension Plan ,797,778 27,441 Pension plans having more than 5, contracts in force as of December 31, 29. The complete list is available at

52

53 3 Pension Mutual Funds 3.1 Worldwide Pension Funds 3.2 Pension Mutual Funds and Securities Mutual Funds in Turkey 3.3 Asset Allocation of Fund Groups 3.4 Total Net Asset Values and Average Returns of Fund Groups 3.5 Returns of Pension Mutual Funds 3.6 Risk Analysis of Pension Mutual Funds 3.7 Management Fees of Pension Mutual Funds 3.8 Pension Mutual Funds Data

54 52 Individual Pension System 29 Progress Report PENSION MUTUAL FUNDS Worldwide Pension 3.1 Funds Pension Funds Nominal Investment Rate of Return in Selected OECD Countries 2 Jan-Jun 29 Jan-Dec 28 1 Return (%) -1-2 Turkey Korea Czech Republic Italy Slovak Republic Spain Norway Simple Average Switzerland Austria Portugal Poland Canada Finland Netherlands Hungary Weighted Average Australia United States Ireland -3-4 Source: OECD Pension Markets in Focus, October 29 Due to the economic crisis, OECD pension funds experienced on average a negative return of 21.4% in 28, however compensating slightly, they have regained 3.5% in value during the first half of 29. The recovery in pension fund performance went on through the end of 29, especially with the upwards motion of equity returns, but it will take some time for the 28 losses to be fully recouped. Yearly Variation of Pension Fund Assets in OECD Countries (28/27) Ratio (%) Australia Austria Belgium Canada Czech Republic Denmark Finland Germany Greece Hungary Iceland Ireland Italy Korea Luxembourg Mexico Netherlands New Zealand Norway Poland Portugal Spain Sweden Switzerland United States -3 Source: OECD, Global Pension Statistics In most OECD countries, pension funds have registered losses in 28 relative to the end of 27. The losses were accounted for 24.19% in the United States, 26.65% in Ireland, 15.6% in Canada and 12.51% in Netherlands. Moreover, pension fund assets were 14% below their 27 levels as of June, 29.

55 Individual Pension System 29 Progress Report 53 Pension Mutual Funds and 3.2 Securities Mutual Funds in Turkey Net asset value of pension mutual funds, growing by 43% relative to previous year, reached to TL 9,16,887,16 in 29. Along with the 2 funds that were established but not offered to public, this amount is TL 9,19,574, pension mutual funds were offered to public including those of Deniz Emeklilik ve Hayat A.Ş. s commenced its operations within the year. There are 128 pension mutual funds which are offered to public as of December 31, 29. The following table presents the sizes, asset allocation and average terms of mutual funds and pension mutual funds as of December 31, 29. Consolidated Data of Mutual Funds as of December 31, 29 Fund Type Average Term (Days) Total Net Asset Value (TL) Stocks (%) Gov t Bonds and Bills (%) Reverse Repo (%) Stock Exchange Money Market (%) Foreign Securities (%) Other (%) Mutual Funds Type A 79 1,49,81, Type B 56 28,558,474, TOTAL 57 29,68,276, Pension Mutual Funds TOTAL 332 9,19,574, Source: Capital Markets Board and Pension Monitoring Center Total net asset value and asset allocation are the data as of January 4, 21 which is a basis for unit fund value on December 31, 29. Growth of Pension Mutual Funds 1, Gov't Bonds and Bills (TL) Stocks 9, Liquid Gov't Bonds and Bills (FX) Net Asset Value (TL Million) 8, 7, 6, 5, 4, 3, 2, Flexible Balanced International 1,

56 54 Individual Pension System 29 Progress Report PENSION MUTUAL FUNDS Net Asset Value of Pension Mutual Funds according to Fund Groups and their Growth Rate in Gov't Bonds and Bills (TL) Liquid Flexible Balanced Stocks Gov't Bonds and Bills (FX) International 11 9 Growth (%) 7 5 The bubbles areas are proportional to total net asset values at the 29 year-end Average Term in Pension Mutual Funds and Securities Mutual Funds 6 Pension Mutual Funds Securities Mutual Funds 5 Average Term (Days) Source: Capital Markets Board The chart above presents the historical change of average terms of fixed income securities in pension mutual funds and securities mutual funds on a monthly basis since the beginning of 28. Average term of pension mutual funds was 4 days as of Disclaimer for the Analysis or Pension Mutual Funds Pension mutual funds are managed by portfolio managers in portfolio management companies. Even though the success of the fund depends directly on the performance of the fund manager, this report compares the performance of the funds within a given period rather than that of the fund managers. Since the calculations are based on historical data, the results cannot be regarded as indicators for the following period s performance and it neither reflects the change of management nor measures the skills of the managers. Pension mutual funds have long-term investment strategies. Therefore, assessing the December, 28. It fluctuated between 35-4 days in 29 and by the end of the year, declined to 33 days. On the other hand, the average term of mutual funds varied between 6-9 days in 29 due to the 96% share of liquid funds in their portfolio. future performance of the funds by analyzing the performance of the year 29 may not lead to exact results. There are several generally accepted methods that can be utilized in assessing the performance of pension mutual funds. However, since each method differs in terms of the perspective, it is not justifiable to compare the results only. In this report, some of the generally accepted methods are used and the outputs are interpreted to inform the reader.

57 Individual Pension System 29 Progress Report 55 Asset Allocation of Fund 3.3 Groups Consolidated Asset Allocation of Pension Mutual Funds (%) Gov't Bonds and Bills Stocks Reverse Repo Foreign Securities Other Ratio (%) In 29, Gov t Bonds and Bills share fluctuated within 69-75%, reverse repo, 12-17% and the stocks, 7-11% in the total portfolio of pension mutual funds. In the first quarter of 29, when the effects of economic crisis are felt deeply, investments on Gov t Bonds and Bills increased to 75%, reverse repo to 17% and stocks dropped to 7%. In the chart, portfolio allocations are weighted by daily net asset values. Stock Exchange Money Market Investment Instruments shares are calculated within the Other segment. Variation of Pension Mutual Funds Portfolio Allocation according to Previous Year Gov't Bonds and Bills Stocks Reverse Repo Foreign Securities Other Ratio (%)

58 56 Individual Pension System 29 Progress Report PENSION MUTUAL FUNDS The chart below presents the portfolio allocation of Flexible Funds, whose asset allocation is not pre-specified but determined in accordance with the market conditions within the limits laid down at the relevant regulations. Asset Allocation of Flexible Funds (%) Gov't Bonds and Bills Stocks Reverse Repo Foreign Securities Other Ratio (%) Asset Allocation of Pension Mutual Funds in 29 according to Founder (%) Gov't Bonds and Bills Stocks Reverse Repo Foreign Securities Other 1 8 Ratio (%) AG: Aegon Emeklilik ve Hayat A.Ş. AH: Anadolu Hayat Emeklilik A.Ş. AL: Allianz Hayat ve Emeklilik A.Ş. AS: Avivasa Emeklilik ve Hayat A.Ş. ER: Ergoİsviçre Emeklilik ve Hayat A.Ş. FI: Finans Emeklilik ve Hayat A.Ş. FO: Fortis Emeklilik ve Hayat A.Ş. GA: Garanti Emeklilik ve Hayat A.Ş. GR: Groupama Emeklilik A.Ş. IN: Ing Emeklilik A.Ş. VA: Vakıf Emeklilik A.Ş. YK: Yapı Kredi Emeklilik A.Ş. AG AH AL AS ER FI FO GA GR IN VA YK The funds founded by Deniz Emeklilik ve Hayat A.Ş. and offered to public on November 18, 29 are not included in the asset allocation chart above. The chart above shows the annual average asset allocation of pension mutual funds according to founders. In the calculations, daily allocations of funds are weighted by net asset values, and annual average of each asset is calculated with respect to founders. The funds offered to public in 29 are not included in the averages.

59 Individual Pension System 29 Progress Report 57 Total Net Asset Values and Average 3.4 Returns of Fund Groups Total Net Asset Values and Average Returns of Fund Groups Number of Funds Total Net Asset Value (TL) Change (%) The Share of Fund Group Net Asset Value in the Total 29 (%) Annual Return of 29 (*) / (%) Gov t Bonds and Bills (TL) 27 3,424,13,449 4,99,747, Liquid 18 1,84,982,641 1,194,591, Flexible 28 1,116,496,846 1,795,488, Balanced 3 149,845, ,757, Stocks 18 21,41, ,8, Gov t Bonds and Bills (FX) 24 36,235, ,, International 1 38,383,926 38,293, TOTAL 128 6,384,485,2 9,16,887, (*) Returns weighted by daily net asset values. The funds offered to public in 29 are not included in the averages. Change of Net Asset Values of Fund Groups by Years (24-29) TL Million 1,6 1,5 1,4 1,3 1,2 1,1 1, Gov't Bonds and Bills (TL) Liquid Flexible Balanced Stocks Gov't Bonds and Bills (FX) International The chart presents the annual change of net asset values of pension mutual funds with respect to the previous year between 24 and 29 according to fund groups.

60 58 Individual Pension System 29 Progress Report PENSION MUTUAL FUNDS Change of Average Returns of Fund Groups in 29 1 Gov't Bonds and Bills (TL) Liquid Flexible Balanced Stocks Gov't Bonds and Bills (FX) International Individual Pension System 8 6 Return (%) The chart presents the historical change of average returns of fund groups since the beginning of 29. The average returns of fund groups are weighted by daily net asset values. Change of Average Returns of Fund Groups from the Beginning of the Individual Pension System Gov't Bonds and Bills (TL) Liquid Flexible Balanced Stocks Gov't Bonds and Bills (FX) International Individual Pension System Index ( =1) The chart above presents the price index of fund groups from the beginning of the individual pension system. Individual Pension System Index was as of December 31, 29. In 29, all the fund groups registered increases in their return index relative to year-end 28. While the index of Stock Funds that nearly doubled the Flexible and Balanced Funds index increased by 38% and, Gov t Bonds and Bills (TL) Funds, which have 54.8% share in total net asset value as of December 31, 29, increased by 17%.

61 Individual Pension System 29 Progress Report 59 Net Asset Values of Pension Mutual Funds according to Founders and Fund Groups 2, Gov't Bonds and Bills (TL) Liquid Flexible-Balanced Stocks Gov't Bonds and Bills (FX) International AG: Aegon Emeklilik ve Hayat A.Ş. AL: Allianz Hayat ve Emeklilik A.Ş. AH: Anadolu Hayat Emeklilik A.Ş. AS: Avivasa Emeklilik ve Hayat A.Ş. FO: Fortis Emeklilik ve Hayat A.Ş. GA: Garanti Emeklilik ve Hayat A.Ş. GR: Groupama Emeklilik A.Ş. IN: Ing Emeklilik A.Ş. VA: Vakıf Emeklilik A.Ş. YK: Yapı Kredi Emeklilik A.Ş. 1,8 Net Asset Value (TL Million) 1,6 1,4 1,2 1, AG AL AH AS FO GA GR IN VA YK The funds of Ergoİsviçre Emeklilik ve Hayat A.Ş. and Finans Emeklilik ve Hayat A.Ş. (offered to public in 28) and Deniz Emeklilik ve Hayat A.Ş. (offered to public in 29) are not included in the chart. Flexible Funds that comprise 2% of pension funds net asset value, had on average 21% stocks and 62% Gov t Bonds and Bills in their portfolio in 29. They nominally returned 32% in 29.

62 6 Individual Pension System 29 Progress Report PENSION MUTUAL FUNDS 3.5 Returns of Pension Mutual Funds Pension Mutual Funds that Outperformed their Benchmarks (Except Flexible Funds) Pension Mutual Funds Return in 29 (%) 29 Annual Return Ranking Benchmark Return in 29(%) Difference (Returns in Benchmark Return) Annual Internal Rate of Return (%) Annual Internal Rate of Return Ranking Ergoİsviçre Emeklilik ve Hayat A.Ş. Stock Growth PMF Aegon Emeklilik ve Hayat A.Ş. Stock Income PMF Finans Emeklilik ve Hayat A.Ş. Stock Growth PMF Vakıf Emeklilik A.Ş. Stock Growth PMF Groupama Emeklilik A.Ş. Stock Growth Group PMF Anadolu Hayat Emeklilik A.Ş. Stock Growth Beyaz PMF Ing Emeklilik A.Ş. Stock Growth PMF Avivasa Emeklilik ve Hayat A.Ş. Stock Growth PMF Anadolu Hayat Emeklilik A.Ş. Stock Growth PMF Anadolu Hayat Emeklilik A.Ş. Stock Growth Group PMF Yapı Kredi Emeklilik A.Ş. Stock Growth PMF Groupama Emeklilik A.Ş. Stock Growth PMF Ing Emeklilik A.Ş. Gov't Bonds and Bills PMF Ing Emeklilik A.Ş. Composite Growth PMF Avivasa Emeklilik ve Hayat A.Ş. Stock Growth Group PMF Fortis Emeklilik ve Hayat A.Ş. Stock Growth PMF Ing Emeklilik A.Ş. Gov't Bonds and Bills Income PMF Anadolu Hayat Emeklilik A.Ş. International Composite Growth PMF Avivasa Emeklilik ve Hayat A.Ş. International Bonds and Bills Income PMF Garanti Emeklilik ve Hayat A.Ş. Gov't Bonds and Bills (FX) Income PMF Avivasa Emeklilik ve Hayat A.Ş. Gov't Bonds and Bills (USD) Income PMF Aegon Emeklilik ve Hayat A.Ş. Gov't Bonds and Bills Income PMF Anadolu Hayat Emeklilik A.Ş. Gov't Bonds and Bills Income Group PMF Garanti Emeklilik ve Hayat A.Ş. Gov't Bonds and Bills Income Group PMF Allianz Hayat ve Emeklilik A.Ş. Gov't Bonds and Bills (FX) Income PMF Anadolu Hayat Emeklilik A.Ş. Gov't Bonds and Bills Income Beyaz PMF Avivasa Emeklilik ve Hayat A.Ş. Gov't Bonds and Bills Group PMF The funds offered to public in 29 are excluded from the table. Key ranking column is shaded. 27 of the 9 pension mutual funds for which benchmark returns are calculated, had higher performance than their benchmarks.

63 Individual Pension System 29 Progress Report 61 According to Capital Markets Board announcement dated December 15, 24 regarding the presentation of fund performances, determination of benchmark criteria is not obligatory for Flexible Funds, as the portfolio structure/ management strategy of these funds are not suitable for benchmarking. Therefore, benchmarks for Flexible Funds are not calculated. The 29 data for Flexible Funds are presented in the following table. Data of Flexible Pension Mutual Funds Pension Mutual Funds Date of Public Offering Return in 29 (%) 29 Annual Return Ranking Annual Internal Rate of Return (%) Allianz Hayat ve Emeklilik A.Ş. Flexible Growth PMF Allianz Hayat ve Emeklilik A.Ş. Flexible Growth Group PMF Anadolu Hayat Emeklilik A.Ş. Flexible Growth PMF Anadolu Hayat Emeklilik A.Ş. Flexible Growth Turuncu PMF Anadolu Hayat Emeklilik A.Ş. Flexible PMF Anadolu Hayat Emeklilik A.Ş. Flexible Income PMF Anadolu Hayat Emeklilik A.Ş. Flexible Income Group PMF Avivasa Emeklilik ve Hayat A.Ş. Flexible Growth PMF Avivasa Emeklilik ve Hayat A.Ş. Flexible Income PMF Avivasa Emeklilik ve Hayat A.Ş. Flexible PMF Deniz Emeklilik ve Hayat A.Ş. Flexible Group PMF* Deniz Emeklilik ve Hayat A.Ş. Flexible PMF* Ergoİsviçre Emeklilik ve Hayat A.Ş. Flexible Growth PMF Ergoİsviçre Emeklilik ve Hayat A.Ş. Flexible Group PMF* Finans Emeklilik ve Hayat A.Ş. Flexible PMF Fortis Emeklilik ve Hayat A.Ş. Flexible PMF Garanti Emeklilik ve Hayat A.Ş. Flexible PMF Garanti Emeklilik ve Hayat A.Ş. Flexible Group PMF Garanti Emeklilik ve Hayat A.Ş. Flexible Alternative PMF* Groupama Emeklilik A.Ş. Flexible PMF Groupama Emeklilik A.Ş. Flexible Group PMF Ing Emeklilik A.Ş. Flexible Growth PMF Ing Emeklilik A.Ş. Flexible PMF Ing Emeklilik A.Ş. Flexible Income PMF Vakıf Emeklilik A.Ş. Flexible PMF Vakıf Emeklilik A.Ş. Flexible Group PMF Yapı Kredi Emeklilik A.Ş. Flexible (TL) Group PMF Yapı Kredi Emeklilik A.Ş. Flexible PMF (*) Offered to public in 29. Annual internal rate of return is not calculated for the funds offered to public in 29 and these funds are excluded from annual return rankings.

64 62 Individual Pension System 29 Progress Report PENSION MUTUAL FUNDS Returns of Pension Mutual Funds in 29 according to Fund Groups and Founders AG: Aegon Emeklilik ve Hayat A.Ş. AL: Allianz Hayat ve Emeklilik A.Ş. AH: Anadolu Hayat Emeklilik A.Ş. AS: Avivasa Emeklilik ve Hayat A.Ş. ER: Ergoİsviçre Emeklilik ve Hayat A.Ş. FI: Finans Emeklilik ve Hayat A.Ş. FO: Fortis Emeklilik ve Hayat A.Ş. GA: Garanti Emeklilik ve Hayat A.Ş. GR: Groupama Emeklilik A.Ş. IN: Ing Emeklilik A.Ş. VA: Vakıf Emeklilik A.Ş. YK: Yapı Kredi Emeklilik A.Ş. Return (%) AG AL AH AS AS FI GA VA VA YK AE AL AL AH AS AS ER FI FO FO GA GR IN VA VA YK YK AL AL AL AH AH AH AS AS AS AS ER ER FO FO GA GA GA GR GR VA YK YK YK AE AL AL AH AH AH AH AS AS AS ER FI FO FO GA GA GA GR GR IN IN VA VA YK YK AG AL AH AH AH AS AS AS ER FI FO GA GR GR IN VA YK AL AL AH AH AH AH AH AS AS AS ER FI FO GA GA GR GR IN IN IN VA VA YK YK AG AS IN International Liquid Gov't Bonds and Bills (FX) Gov't Bonds and Bills (TL) Stocks Flexible Average weighted fund group return 9 funds that are offered to public in 29 are not included in the chart. Balanced Returns of Funds and their Benchmarks in Return of the Fund (%) Aegon Emeklilik ve Hayat A.Ş. Allianz Hayat ve Emeklilik A.Ş. Anadolu Hayat Emeklilik A.Ş. Avivasa Emeklilik ve Hayat A.Ş. Ergoİsviçre Emeklilik ve Hayat A.Ş. Finans Emeklilik ve Hayat A.Ş. Fortis Emeklilik ve Hayat A.Ş. Garanti Emeklilik ve Hayat A.Ş. Groupama Emeklilik A.Ş. Ing Emeklilik A.Ş. Vakıf Emeklilik A.Ş. Yapı Kredi Emeklilik A.Ş Return of the Benchmark (%) The funds offered to public in 29 are not included in the chart.

65 Individual Pension System 29 Progress Report 63 Net Asset Values of Pension Mutual Funds according to Founder Total Net Asset Value (TL) Founder Ratio (%) Aegon Emeklilik ve Hayat A.Ş Allianz Hayat ve Emeklilik A.Ş. 16,372,28 235,79, ,76, ,157, Anadolu Hayat Emeklilik A.Ş. 528,538,522 91,414,689 1,322,987,329 1,953,537, Avivasa Emeklilik ve Hayat A.Ş. 696,667,371 1,129,986,386 1,44,396,293 1,993,73, Deniz Emeklilik ve Hayat A.Ş.* 12,956, Ergoİsviçre Emeklilik ve Hayat A.Ş. 6,613,942 16,19, Finans Emeklilik ve Hayat A.Ş. 2,23,693 16,941, Fortis Emeklilik ve Hayat A.Ş. 83,235, ,857, ,774, ,14, Garanti Emeklilik ve Hayat A.Ş. 3,229, ,723,4 898,92,845 1,326,745, Groupama Emeklilik A.Ş. 168,45, ,385,42 373,334, ,61, Ing Emeklilik A.Ş. 17,178, ,285,53 35,478,43 59,91, 5.6 Vakıf Emeklilik A.Ş. 19,47, ,93, ,148, ,66, Yapı Kredi Emeklilik A.Ş. 48,628,312 7,943,62 951,219,195 1,37,198, TOTAL 2,82,1,28 4,57,924,599 6,384,485,2 9,16,887,16 1. * Deniz Emeklilik ve Hayat A.Ş. launched its operations on May 21, 29 and the funds of the company were offered to public on November 18, 29. The table above presents the total asset values of pension mutual funds in 26 through 29 and the founders share in the total as of December 31, 29. Net Asset Values of Pension Mutual Funds according to Founder and their Growth Rate in Growth (%) Aegon Emeklilik ve Hayat A.Ş. Allianz Hayat ve Emeklilik A.Ş. Anadolu Hayat Emeklilik A.Ş. Avivasa Emeklilik ve Hayat A.Ş. Fortis Emeklilik ve Hayat A.Ş. Garanti Emeklilik ve Hayat A.Ş. Groupama Emeklilik A.Ş. Ing Emeklilik A.Ş. Vakıf Emeklilik A.Ş. Yapı Kredi Emeklilik A.Ş. The funds of Ergoİsviçre Emeklilik ve Hayat A.Ş. and Finans Emeklilik ve Hayat A.Ş. are not included in the chart. Please refer to the above table to calculate their growth rates.

66 64 Individual Pension System 29 Progress Report PENSION MUTUAL FUNDS Risk Analysis of Pension Mutual 3.6 Funds Sharpe ratio has been calculated from the date of funds public offering. Institutional Investment Managers Association (KYD) O/N Gross Repo Index is used as rate of the risk free return in the calculations. On the Individual Pension System Progress Report 28, risk free return for Gov t Bonds and Bills (FX) and International Funds were considered as the benchmark return indexes. Top 2 Pension Mutual Funds according to their Sharpe Ratios Number 1 Pension Mutual Funds Ergoİsviçre Emeklilik ve Hayat A.Ş. Gov't Bonds and Bills Income PMF Date of Public Offering Average Daily Return (%) Standard Deviation (%) Sharpe Ratio (g) Ergoİsviçre Emeklilik ve Hayat A.Ş. Flexible Growth PMF Finans Emeklilik ve Hayat A.Ş. Gov't Bonds and Bills Income PMF Groupama Emeklilik A.Ş. Gov't Bonds and Bills Income Group PMF Groupama Emeklilik A.Ş. Flexible Group PMF Ergoİsviçre Emeklilik ve Hayat A.Ş. Stock Growth PMF Finans Emeklilik ve Hayat A.Ş. Stock Growth PMF Finans Emeklilik ve Hayat A.Ş. Flexible PMF Yapı Kredi Emeklilik A.Ş. Gov't Bonds and Bills Income Group PMF Ing Emeklilik A.Ş. Flexible Growth PMF Anadolu Hayat Emeklilik A.Ş. Gov't Bonds and Bills Income Group PMF Allianz Hayat ve Emeklilik A.Ş. Gov't Bonds and Bills Income Group PMF Vakıf Emeklilik A.Ş. Gov't Bonds and Bills Income Group PMF Avivasa Emeklilik ve Hayat A.Ş. Flexible Income PMF Fortis Emeklilik ve Hayat A.Ş. Gov't Bonds and Bills Income Group PMF Anadolu Hayat Emeklilik A.Ş. Flexible Growth PMF Yapı Kredi Emeklilik A.Ş. Gov't Bonds and Bills Income PMF Anadolu Hayat Emeklilik A.Ş. Gov't Bonds and Bills Income Beyaz PMF Garanti Emeklilik ve Hayat A.Ş. Gov't Bonds and Bills Income PMF Anadolu Hayat Emeklilik A.Ş. Gov't Bonds and Bills Income PMF Key ranking column is shaded. The funds offered to public in 29 and the funds whose fund types changed in 28 are excluded from calculations. Calculations cover the period starting from the fund s public offering (g) These calculations are based on the daily average returns.

67 Individual Pension System 29 Progress Report 65 The table below presents the Alpha and Beta coefficients. Beta coefficient reflects the variation of the investment s return in relation to the unit change in the market return. A positive Alpha indicates that the return is higher than the market s return. If Alpha is equal to it can be said that fund has a passive fund management strategy. If Beta is; =1 the fund price moves with the market >1 the fund price is more volatile than the market <1 the fund price is less volatile than the market Pension Mutual Funds with Positive Alpha Coefficient (Except International Funds) Pension Mutual Funds Date of Public Offering Average Daily Fund Group Return (%) Beta (g) Alpha (%) (g) Ergoİsviçre Emeklilik ve Hayat A.Ş. Stock Growth PMF Stocks Finans Emeklilik ve Hayat A.Ş. Stock Growth PMF Stocks Groupama Emeklilik A.Ş. Stock Growth Group PMF Stocks Anadolu Hayat Emeklilik A.Ş. Flexible Growth PMF Flexible Groupama Emeklilik A.Ş. Flexible Group PMF Flexible Ergoİsviçre Emeklilik ve Hayat A.Ş. Flexible Growth PMF Flexible Anadolu Hayat Emeklilik A.Ş. Stock Growth Group PMF Stocks Anadolu Hayat Emeklilik A.Ş. Stock Growth PMF Stocks Aegon Emeklilik ve Hayat A.Ş. Stock Income PMF Stocks Vakıf Emeklilik A.Ş. Stock Growth PMF Stocks Finans Emeklilik ve Hayat A.Ş. Flexible PMF Flexible Ing Emeklilik A.Ş. Composite Growth PMF Balanced Ing Emeklilik A.Ş. Flexible Growth PMF Flexible Yapı Kredi Emeklilik A.Ş. Flexible (TL) Group PMF Flexible Groupama Emeklilik A.Ş. Gov't Bonds and Bills Income Group PMF Gov t TL Avivasa Emeklilik ve Hayat A.Ş. Stock Growth Group PMF Stocks Avivasa Emeklilik ve Hayat A.Ş. Stock Growth PMF Stocks Yapı Kredi Emeklilik A.Ş. Stock Growth PMF Stocks Anadolu Hayat Emeklilik A.Ş. Flexible PMF Flexible Ing Emeklilik A.Ş. Stock Growth PMF Stocks Yapı Kredi Emeklilik A.Ş. Flexible PMF Flexible Ing Emeklilik A.Ş. Flexible PMF Flexible Avivasa Emeklilik ve Hayat A.Ş. Flexible Income PMF Flexible Anadolu Hayat Emeklilik A.Ş. Gov't Bonds and Bills Income Group PMF Gov t TL Anadolu Hayat Emeklilik A.Ş. Gov't Bonds and Bills Income Beyaz PMF Gov t TL Anadolu Hayat Emeklilik A.Ş. Flexible Income Group PMF Flexible Anadolu Hayat Emeklilik A.Ş. Stock Growth Beyaz PMF Stocks (g) These calculations are based on the daily returns. Calculations cover the period starting from the fund s public offering. The funds offered to public in 29 and the funds whose fund types have changed in 28 are excluded from calculations.

68 66 Individual Pension System 29 Progress Report PENSION MUTUAL FUNDS Market Indexes Used for Fund Groups Liquid Funds Flexible and Balanced Funds Stock Fund Stock (Index) Funds Gov t Bonds and Bills Funds (TL) Gov t Bonds and Bills Funds (FX) KYD 3 Days Bond Index Weighted Average Return of the Related Fund Group ISE-1 ISE-3 KYD Whole Bond Index (TL) 1% KYD O/N Gross Repo Indexes 45% KYD Gov t Bonds and Bills FX Indexes USD-TL 45% KYD Eurobond Indexes EUR-TL Risk and return levels are measured in the following study. Institutional Investment Managers Association (KYD) O/N Gross Repo Index is considered as risk free return. Risk represents the standart deviation of series calculated by subtracting daily risk free returns from daily returns of pension mutual funds while return is the arithmetic average of this series. Due to the nature of the investment instruments, it is expected that the riskier is the instrument the higher is the expected return. On the chart, same colors indicate same fund groups. Calculations begin from the date of public offering of the funds. The funds available for more than four years are analyzed in the following chart in order to distinguish the effects of economic fluctuations in the recent years, at risk measurement. Mean and Standard Deviation of Riskfree Daily Returns.6.4 Average of Riskfree Daily Return (%) Gov't Bonds and Bills (TL) Liquid Flexible Balanced Stocks Gov't Bonds and Bills (FX) International Standard Deviation of Riskfree Daily Return (%)

69 Individual Pension System 29 Progress Report 67 Management Fees of Pension 3.7 Mutual Funds The following chart presents average monthly trends in fund management fees, according to fund groups weighted by the net asset values of funds. Bonus applications involving fund management fees in some pension plans are disregarded in this study. Development of Average Monthly Fund Management Fee Ratios according to Fund Groups Gov't Bonds and Bills (TL) Liquid Flexible-Balanced Gov't Bonds and Bills (FX) Stocks International SECTOR Daily Fund Management Fee Ratio (.%)

70 68 Individual Pension System 29 Progress Report PENSION MUTUAL FUNDS 3.8 Pension Mutual Funds Data Date Of Public Offering Net Asset Value (TL) Unit Fund Value (TL) Unit Fund Value (TL) Nominal Return from Date of Public Offering (%) Aegon Emeklilik ve Hayat A.Ş. Balanced PMF ,959, Aegon Emeklilik ve Hayat A.Ş. Stock Income PMF ,585, Aegon Emeklilik ve Hayat A.Ş. Gov't Bonds and Bills Income PMF ,721, Aegon Emeklilik ve Hayat A.Ş. Gov't Bonds and Bills Liquid PMF ,491, Aegon Emeklilik ve Hayat A.Ş. International Bonds and Bills Income PMF ,815, Allianz Hayat ve Emeklilik A.Ş. Flexible Growth PMF ,574, Allianz Hayat ve Emeklilik A.Ş. Gov't Bonds and Bills (FX) Income PMF ,53, Allianz Hayat ve Emeklilik A.Ş. Gov't Bonds and Bills Income PMF ,511, Allianz Hayat ve Emeklilik A.Ş. Gov't Eurobond Income PMF ,166, Allianz Hayat ve Emeklilik A.Ş. International Flexible Income PMF ,458, Allianz Hayat ve Emeklilik A.Ş. ISE 3 Index Specialized PMF ,334, Allianz Hayat ve Emeklilik A.Ş. Gov't Bonds and Bills Liquid PMF ,97, Allianz Hayat ve Emeklilik A.Ş. Gov't Bonds and Bills Liquid PMF ,77, Allianz Hayat ve Emeklilik A.Ş. Flexible Growth Group PMF ,163, Allianz Hayat ve Emeklilik A.Ş. Gov't Bonds and Bills Income Group PMF ,377, Allianz Hayat ve Emeklilik A.Ş. Composite Bonds and Bills (FX) Income Group PMF , Anadolu Hayat Emeklilik A.Ş. Flexible Growth PMF ,32, Anadolu Hayat Emeklilik A.Ş. Flexible Growth Turuncu PMF ,38, Anadolu Hayat Emeklilik A.Ş. Stock Growth Beyaz PMF ,979, Anadolu Hayat Emeklilik A.Ş. Stock Growth PMF ,51, Anadolu Hayat Emeklilik A.Ş. International Composite Growth PMF ,144, Anadolu Hayat Emeklilik A.Ş. Flexible PMF ,97, Anadolu Hayat Emeklilik A.Ş. Gov't Bonds and Bills Income Beyaz PMF ,25, Anadolu Hayat Emeklilik A.Ş. Gov't Bonds and Bills Income Turuncu PMF ,927, Anadolu Hayat Emeklilik A.Ş. Flexible Income PMF ,587, Anadolu Hayat Emeklilik A.Ş. Gov't Bonds and Bills Income PMF ,747, Anadolu Hayat Emeklilik A.Ş. Composite Bonds and Bills Income (USD) PMF ,616, Anadolu Hayat Emeklilik A.Ş. Composite Bonds and Bills Income (Euro) PMF ,619, Anadolu Hayat Emeklilik A.Ş. Stock Growth Group PMF ,42, Anadolu Hayat Emeklilik A.Ş. Flexible Income Group PMF ,914, Anadolu Hayat Emeklilik A.Ş. Gov't Bonds and Bills Income Group PMF ,478, Anadolu Hayat Emeklilik A.Ş. Composite Bonds and Bills Income Group PMF ,25, Anadolu Hayat Emeklilik A.Ş. Gov't Bonds and Bills Liquid PMF ,995, Avivasa Emeklilik ve Hayat A.Ş. Balanced PMF ,66, Avivasa Emeklilik ve Hayat A.Ş. Flexible Growth PMF ,717, Avivasa Emeklilik ve Hayat A.Ş. Flexible Income PMF ,919, Avivasa Emeklilik ve Hayat A.Ş. Flexible PMF ,868, Avivasa Emeklilik ve Hayat A.Ş. Stock Growth Group PMF ,73, Avivasa Emeklilik ve Hayat A.Ş. Stock PMF ,661, Avivasa Emeklilik ve Hayat A.Ş. Stock Growth PMF ,611, Avivasa Emeklilik ve Hayat A.Ş. Gov't Bonds and Bills Income PMF ,11, Avivasa Emeklilik ve Hayat A.Ş. Gov't Bonds and Bills Group PMF ,65, Avivasa Emeklilik ve Hayat A.Ş. Gov't Bonds and Bills PMF ,57, Avivasa Emeklilik ve Hayat A.Ş. Gov't Bonds and Bills (USD) Income PMF ,535, Avivasa Emeklilik ve Hayat A.Ş. Composite Bonds and Bills Income (Euro) PMF ,466, Avivasa Emeklilik ve Hayat A.Ş. Gov't Eurobond Income PMF ,966, Avivasa Emeklilik ve Hayat A.Ş. Gov't Eurobond Income Group PMF ,149, Avivasa Emeklilik ve Hayat A.Ş. Gov't Bonds and Bills Money Market Liquid PMF ,42, Avivasa Emeklilik ve Hayat A.Ş. Gov't Bonds and Bills Liquid PMF ,38, Avivasa Emeklilik ve Hayat A.Ş. International Composite Income PMF ,939, Avivasa Emeklilik ve Hayat A.Ş. International Bonds and Bills Income PMF ,119, Deniz Emeklilik ve Hayat A.Ş. Flexible Group PMF ,64, Deniz Emeklilik ve Hayat A.Ş. Stock Growth PMF , Deniz Emeklilik ve Hayat A.Ş. Flexible PMF , Deniz Emeklilik ve Hayat A.Ş. Gov't Bonds and Bills Income PMF , Deniz Emeklilik ve Hayat A.Ş. Gov't Eurobond Income PMF , Deniz Emeklilik ve Hayat A.Ş. Gov't Bonds and Bills Income Group PMF ,522, Deniz Emeklilik ve Hayat A.Ş. Liquid PMF , Ergoİsviçre Emeklilik ve Hayat A.Ş. Flexible Growth PMF ,415, Ergoİsviçre Emeklilik ve Hayat A.Ş. Stock Growth PMF ,449, Ergoİsviçre Emeklilik ve Hayat A.Ş. Gov't Bonds and Bills Income PMF ,187, Ergoİsviçre Emeklilik ve Hayat A.Ş. Gov't Bonds and Bills (USD) Income PMF ,149,

71 Individual Pension System 29 Progress Report 69 Return in 29 (%) 29 Return Ranking Benchmark Return in 29 (%) Annual Internal Rate of Return (%) Annual Internal Rate of Return Ranking 29 Average Daily Return (%) 29 Standard Deviation (g) (%) Sharpe ratio (g) Beta Coefficient (g) Alpha Coefficient (g) (%)

72 7 Individual Pension System 29 Progress Report PENSION MUTUAL FUNDS Date Of Public Offering Net Asset Value (TL) Unit Fund Value (TL) Unit Fund Value (TL) Nominal Return from Date of Public Offering (%) Ergoİsviçre Emeklilik ve Hayat A.Ş. Flexible Group PMF , Ergoİsviçre Emeklilik ve Hayat A.Ş. Gov't Bonds and Bills Liquid PMF ,552, Ergoİsviçre Emeklilik ve Hayat A.Ş. Gov't Bonds and Bills Income Euro PMF ,115, Finans Emeklilik ve Hayat A.Ş. International Composite Growth PMF , Finans Emeklilik ve Hayat A.Ş. Flexible PMF ,416, Finans Emeklilik ve Hayat A.Ş. Gov't Bonds and Bills Income PMF ,399, Finans Emeklilik ve Hayat A.Ş. Stock Growth PMF ,186, Finans Emeklilik ve Hayat A.Ş. Gov't Bonds and Bills Liquid PMF ,238, Fortis Emeklilik ve Hayat A.Ş. Flexible PMF ,675, Fortis Emeklilik ve Hayat A.Ş. Composite Bonds and Bills Income (USD) PMF ,675, Fortis Emeklilik ve Hayat A.Ş. Composite Bonds and Bills (FX) Income PMF ,932, Fortis Emeklilik ve Hayat A.Ş. Gov't Bonds and Bills Income PMF ,19, Fortis Emeklilik ve Hayat A.Ş. Stock Growth PMF ,4, Fortis Emeklilik ve Hayat A.Ş. Composite Gov't Bonds and Bills Liquid PMF ,285, Fortis Emeklilik ve Hayat A.Ş. Gov't Bonds and Bills Liquid PMF ,695, Fortis Emeklilik ve Hayat A.Ş. Gov't Bonds and Bills Income Group PMF , Garanti Emeklilik ve Hayat A.Ş. Stock Growth PMF ,727, Garanti Emeklilik ve Hayat A.Ş. Flexible PMF ,713, Garanti Emeklilik ve Hayat A.Ş. Gov't Bonds and Bills (FX) Income PMF ,718, Garanti Emeklilik ve Hayat A.Ş. Gov't Bonds and Bills Income PMF ,384, Garanti Emeklilik ve Hayat A.Ş. Gov't Eurobond Income PMF ,872, Garanti Emeklilik ve Hayat A.Ş. International Bonds and Bills Income PMF ,9, Garanti Emeklilik ve Hayat A.Ş. Gov't Bonds and Bills Income Group PMF ,566, Garanti Emeklilik ve Hayat A.Ş. Flexible Group PMF ,832, Garanti Emeklilik ve Hayat A.Ş. Gov't Bonds and Bills PMF ,641, Garanti Emeklilik ve Hayat A.Ş. Gov't Bonds and Bills Liquid PMF ,386, Garanti Emeklilik ve Hayat A.Ş. Composite Bonds and Bills Income Group PMF ,825, Garanti Emeklilik ve Hayat A.Ş. Flexible Alternative PMF , Groupama Emeklilik A.Ş. Stock Growth PMF ,968, Groupama Emeklilik A.Ş. Flexible PMF ,185, Groupama Emeklilik A.Ş. Gov't Bonds and Bills (FX) Income PMF ,368, Groupama Emeklilik A.Ş. Gov't Bonds and Bills Income PMF ,272, Groupama Emeklilik A.Ş. Gov't Bonds and Bills Liquid PMF ,321, Groupama Emeklilik A.Ş. Stock Growth Group PMF ,128, Groupama Emeklilik A.Ş. Flexible Group PMF ,858, Groupama Emeklilik A.Ş. Gov't Bonds and Bills Income Group PMF ,741, Groupama Emeklilik A.Ş. Gov't Bonds and Bills (FX) Income Group PMF , Ing Emeklilik A.Ş. Stock Growth PMF ,253, Ing Emeklilik A.Ş. Composite Growth PMF ,137, Ing Emeklilik A.Ş. Flexible Growth PMF ,199, Ing Emeklilik A.Ş. Flexible PMF ,96, Ing Emeklilik A.Ş. Flexible Income PMF ,243, Ing Emeklilik A.Ş. Gov't Bonds and Bills Income PMF ,2, Ing Emeklilik A.Ş. Gov't Bonds and Bills PMF ,698, Ing Emeklilik A.Ş. Liquid PMF ,387, Vakıf Emeklilik A.Ş. Stock Growth PMF ,22, Vakıf Emeklilik A.Ş. Flexible PMF ,349, Vakıf Emeklilik A.Ş. Gov't Bonds and Bills Income PMF ,92, Vakıf Emeklilik A.Ş. Gov't Eurobond Income PMF ,559, Vakıf Emeklilik A.Ş. International Bonds and Bills Income PMF , Vakıf Emeklilik A.Ş. International Composite Income PMF , Vakıf Emeklilik A.Ş. Gov't Bonds and Bills Liquid PMF ,546, Vakıf Emeklilik A.Ş. Gov't Bonds and Bills Income Group PMF ,761, Vakıf Emeklilik A.Ş. Flexible Group PMF ,15, Vakıf Emeklilik A.Ş. Gov't Bonds and Bills Liquid Group PMF ,867, Yapı Kredi Emeklilik A.Ş. Stock Growth PMF ,947, Yapı Kredi Emeklilik A.Ş. Flexible (FX) Group PMF ,589, Yapı Kredi Emeklilik A.Ş. Flexible (TL) Group PMF ,351, Yapı Kredi Emeklilik A.Ş. Flexible PMF ,832, Yapı Kredi Emeklilik A.Ş. Gov't Bonds and Bills Income PMF ,634, Yapı Kredi Emeklilik A.Ş. Gov't Eurobond Income PMF (Euro) ,251, Yapı Kredi Emeklilik A.Ş. Gov't Bonds and Bills (FX) Income PMF ,657, Yapı Kredi Emeklilik A.Ş. International Composite Income PMF ,37, Yapı Kredi Emeklilik A.Ş. Composite Gov't Bonds and Bills Liquid PMF ,542, Yapı Kredi Emeklilik A.Ş. Gov't Bonds and Bills Liquid PMF ,884, Yapı Kredi Emeklilik A.Ş. Gov't Bonds and Bills Income Group PMF ,136,

73 Individual Pension System 29 Progress Report 71 Return in 29 (%) 29 Return Ranking Benchmark Return in 29 (%) Annual Internal Rate of Return (%) Annual Internal Rate of Return Ranking 29 Average Daily Return (%) 29 Standard Deviation (g) (%) Sharpe ratio (g) Beta Coefficient (g) Alpha Coefficient (g) (%) Total net asset value and asset allocation are the data as of January 4, 21 which is a basis for unit fund value on December 31, 29. Annual internal rate of return is not calculated for the funds offered to public in 29 and these funds are excluded from return ranking. Alpha and Beta Coefficients and Sharpe Ratio for funds offered to public in 29 and the funds whose fund types have changed in 28 are not calculated and are excluded from rankings. (g) These calculations are based on the daily average returns. Since KYD FX DİBS Bono Index EUR-TL is not published after December 8, 29, benchmarks that include this index are ignored in the calculations.

74

75 4 Realizations in 29, Sectoral Expectations for Realizations in Sectoral Expectations for 21

76 74 Individual Pension System 29 Progress Report REALIZATIONS IN 29, SECTORAL EXPECTATIONS FOR Realizations in 29 The consolidated expectations, gathered from pension companies about the 29 year-end, and the corresponding actual figures are presented in the following table. Consolidated Targets and Realizations of Pension Companies for 29 Number of Contracts Pessimistic Most Probable Optimistic Realizations at the end of 29 Number of New Contracts to be Established within the Year 562,91 646, ,6 644,19 Number of Contracts in Force at the Year-end 2,13,852 2,261,383 2,439,425 2,23,886 Number of Participants Number of New Participants with New Contracts within the Year 57,39 591,55 686, ,46 Total Number of Participants at the Year-end 1,91,79 2,52,199 2,218,341 1,987,94 Number of Groups and Group Pension Contracts (Total Numbers at the Year-end) Number of Employee s Groups 6,577 7,41 7,567 1,158 Number of Noncontributory Groups 1,449 1,567 1,681 1,565 Number of Contracts in Employee s Groups 385, , , ,66 Number of Contracts in Noncontributory Groups 73,618 82,245 91,923 72,554 Number of Participants in Group Pension Contracts 379,527 48, ,215 41,923 Total Amount of Contributions Net Contributions from Sponsors in Noncontributory Contracts within the Year (TL) 63,642,891 75,83,9 88,537,792 23,449,145 Net Contributions from Individual Participants within the Year (TL) 9,948,977 1,42,312,589 1,237,34, ,763,36 Net Cumulative Amount of Contributions at the Year-end (TL) 6,859,35,461 7,73,492,666 8,518,973,78 7,12,7,561 Total Amount to be Invested (Total Amount at the Year-end) (TL) 6,577,53,927 7,367,78,358 8,154,578,138 6,869,992,691 Total Amount of Funds Net Cumulative Amount of Funds at the Year-end (TL) 7,782,88,73 8,874,95,683 9,964,64,13 9,97,436,467 Transfers from Provident Funds* Expected Number of Provident Fund Participants to Transfer within the Year 7,9 13,3 21,7 - Expected Amount of Accumulations to be Transferred (TL) 46,5, 87,3, 156,1, 276,576 Transfer of Pension Accounts Among Pension Companies (Total Amount at the Year-end) Number of Contracts to be Transferred within the Year 111, ,66 132,638 76,5 Amount of Transfers within the Year (TL) 612,61,91 676,858,69 746,449, ,62,8 Withdrawals** (Total Amount at the Year End) Expected Number of Participants to Withdraw 831,137 92, ,45 859,374 Expected Amount of Accumulations to be Withdrawn (TL) 2,321,953,299 2,586,437,13 2,865,52,987 2,658,285,672 Intermediaries Number of Intermediaries to be Newly Employed within the Year 3,24 3,939 4,714 5,786 Number of Intermediaries to Quit within the Year 1,639 1,871 2,119 3,766 Total Number of Intermediaries at the Year-end 15,3 15,83 16,33 15,666 * These include transfer of funds from associations, foundations, provident funds and other organizations with retirement provisions. ** Withdrawals due to involuntary reasons are not included.

77 Individual Pension System 29 Progress Report Sectoral Expectations for 21 This section presents survey results applied to pension companies that contain their targets and sectoral expectations for 21. The following table illustrates the minimum, maximum and the average figures related to several quantities regarding the individual pension system, based on the pessimistic, most probable, and optimistic expectations of the pension companies. Expectations Regarding Number of Participants, Amount of Contributions and Accumulations for the Year 21 Pessimistic Minimum Arithmetic Mean Maximum Number of New Participants within the Year 199,3 519, ,14 Total Number of Participants at the Year-end 2,5,478 2,171,23 2,379,6 Net Cumulative Amount of Contributions at the Year-end (TL) 7,12,965,841 8,543,62,681 11,21,111,98 Cumulative Amount of Accumulations at the Year-end (TL) 8,956,472,242 1,549,75,938 11,893,235,584 Most Probable Minimum Arithmetic Mean Maximum Number of New Participants within the Year 221,444 58, ,699 Total Number of Participants at the Year-end 2,16,15 2,291,733 2,422,38 Net Cumulative Amount of Contributions at the Year-end (TL) 7,45,166,238 9,213,672,227 12,445,679,978 Cumulative Amount of Accumulations at the Year-end (TL) 9,951,635,825 11,468,864,288 13,69,296,43 Optimistic Minimum Arithmetic Mean Maximum Number of New Participants within the Year 243, ,29 798,688 Total Number of Participants at the Year-end 2,215,42 2,425,982 2,822,348 Net Cumulative Amount of Contributions at the Year-end (TL) 7,811,844,48 9,861,739,541 13,69,247,976 Cumulative Amount of Accumulations at the Year-end (TL) 1,946,799,47 12,386,932,594 14,376,226,73

78 76 Individual Pension System 29 Progress Report REALIZATIONS IN 29, SECTORAL EXPECTATIONS FOR 21 The following table is composed of three sections. The first section, Consolidated Targets of Pension Companies, contains the sum of pension companies targets. The second section depicts the mean of pessimistic, most probable, and optimistic expectations of the pension companies about the sector for 21. Finally, the third section gives the central tendency and dispersion measures for the most probable sectoral expectations of pension companies. Consolidated Targets of Pension Companies Number of Contracts Pessimistic Most Probable Optimistic Number of Contracts to be Established within the Year 633,23 714, ,531 Number of Contracts in Force at the Year-end 2,442,533 2,56,531 2,681,131 Number of Participants Number of New Participants with New Contracts within the Year 581, , ,269 Total Number of Participants at the Year-end 2,233,41 2,339,993 2,449,22 Number of Groups and Group Pension Contracts (Total Numbers at the Year-end) Number of Employee s Groups 5,53 5,868 6,23 Number of Noncontributory Groups 1,599 1,719 1,844 Number of Contracts in Employee s Groups 413, ,71 477,574 Number of Contracts in Noncontributory Groups 8,963 87,494 97,247 Number of Participants in Group Pension Contracts 423, ,13 491,277 Total Amount of Contributions Net Contributions from Sponsors in Noncontributory Contracts within the Year (TL) 73,811,118 81,266,816 88,587,613 Net Contributions from Individual Participants within the Year (TL) 684,423, ,22,18 833,392,324 Net Cumulative Amount of Contributions at the Year-end (TL) 8,242,849,724 8,96,848,762 9,675,987,699 Total Amount to be Invested (Total Amount at the Year-end) (TL) 7,951,831,375 8,648,38,964 9,338,225,961 Total Amount of Funds Net Cumulative Amount of Contributions at the Year-end (TL) 1,777,33,153 11,745,439,111 12,65,241,333 Transfers from Provident Funds* Expected Number of Provident Fund Participants to Transfer within the Year 3,815 7,69 12,75 Expected Amount of Accumulations to be Transferred 76,95, 11,25, 169,55, Transfer of Pension Accounts Among Pension Companies (Total Amount at the Year-end) Number of Contracts to be Transferred 129,15 138, ,572 Amount of Transfers (TL) 773,11, ,26,983 92,153,569 Withdrawals (Total Amount at the Year End) Expected Number of Participants to Withdraw 1,113,833 1,193,938 1,278,295 Expected Amount of Accumulations to be Withdrawn (TL) 2,715,64,876 2,928,444,658 3,148,787,16 Retirement (Total Amount at the Year End) Expected Number of Participants to Retire 3,312 3,78 4,132 Expected Amount of Accumulations related to Retired Participants (TL) 114,724, ,934,353 14,117,41 Intermediaries Number of Intermediaries to be Newly Employed within the Year 3,368 3,811 4,3 Number of Intermediaries to Quit within the Year 1,548 1,79 1,973 Total Number of Intermediaries at the Year-end 13,89 14,1 14,316 * These include transfer of funds from associations, foundations, provident funds and other organizations with retirement provisions.

79 Individual Pension System 29 Progress Report 77 Sectoral Expectations of Pension Companies (Arithmetic Mean) Analysis of Most Probable Sectoral Expectations Pessimistic Most Probable Optimistic Minimum Maximum Standard Deviation Median 574, , , , ,57 124, ,473 2,397,666 2,533,664 2,678,384 2,397,616 2,655,827 82,472 2,536, ,214 58, ,29 221, , , ,412 2,171,23 2,291,733 2,425,982 2,16,15 2,422,38 74,831 2,3,927 6,914 7,671 8,65 1,5 24,463 6,987 7,273 2,97 3,237 3, ,26 1,819 3, 453, ,44 527,29 429, 62, 42, ,26 75,517 88,281 97,435 75, 16, 21,767 84, , , ,526 46,178 76,5 85, 461,836 42,955,667 49,73,344 57,49,5 1,2, 1,, 3,22,844 47,794, ,417, ,138,225 1,9,124,987 43,, 2,135,359,46 52,758, ,384,615 8,543,62,681 9,213,672,227 9,861,739,541 7,45,166,238 12,445,679,978 1,178,145,914 8,965,276,27 8,23,578,37 8,848,125,99 9,471,594,514 7,24,218,296 12,72,39,579 1,137,157,62 8,648,, 1,549,75,938 11,468,864,288 12,386,932,594 9,951,635,825 13,69,296,43 796,849,343 11,5,, 5,855 7,491 1, , 6,62 8, 85,757,163 19,97, ,788,52 4,, 35,, 15,414,651 85,, 99,598 19,193 12,741 58,255 16, 3,887 15, ,859,366 78,235, ,77,73 362,5, 1,58,181, ,31,164 77,727,497 1,1,569 1,61,583 1,12, ,1 1,2, 12,914 1,1, 3,295,52,741 3,58,439,531 3,882,115,353 2,75,647,65 4,979,131,6 594,311,27 3,691,4, 3,17 3,392 3,78 1,929 5,965 1,163 3, 119,194,79 128,57, ,245,963 71,924, ,175,45 58,47,97 12,515,443 2,489 3,6 3, ,447 1,899 2,881 1,128 1,419 1, ,5 1,177 1,136 16,336 16,616 16,878 14,55 18,91 1,47 16,572

80

81 5 Activities and Publications in the Individual Pension System 5.1 Amendments in the Legal Framework 5.2 Sectoral Activities 5.3 International Publications on Private Pension Systems

82 8 Individual Pension System 29 Progress Report ACTIVITIES AND PUBLICATIONS IN THE INDIVIDUAL PENSION SYSTEM Amendments in the Legal 5.1 Framework January 21, 29: Communiqué on Foreign Assets in which Insurance and Reassurance Companies will Invest Their Technical Reserves governs that rated financial assets issued by foreign countries and traded in foreign markets, deposits and real properties held in foreign markets are subjected to for the technical reserves. March 1, 29: Regulation on the Actuarial Supervision of Organizations That Make Pension-Related Promises lays down the principles and procedures applicable to the actuarial supervision of pension-related activities of any associations, foundations, funds, occupational corporations with legal status or other similar businesses that had made pension promises to their members or employees. March 1, 29: Regulation on Amendments to Regulation on the Financial Structure of Insurance and Reassurance Companies as well as Pension Companies amends a provision of the Regulation on the Financial Structure of Insurance and Reassurance Companies as well as Pensions Companies, published in the Official Gazette No dated August 7, 27, which governs the content of next year s reassurance strategies to be approved by executive boards and boards of directors, and supplements the provision on the weakening of financial structure. March 1, 29: Regulation on Amendments to Regulation on Quantification and Assessment of Capital Adequacy of Insurance and Reassurance Companies as well as Pensions Companies amends article entitled equity capital based on the second method of the Regulation on Quantification and Assessment of Capital Adequacy of Insurance and Reassurance Companies as well as Pensions Companies, published in the Official Gazette No dated January 19, 28, and a provisional article is annexed to the regulation. March 1, 29: Regulation on Amendments to the Regulation on Independent Audit of Insurance and Reassurance Companies as well as Pensions Companies amends certain articles, supplements or revokes some other articles of the Regulation on Independent Audit of Insurance and Reassurance Companies as well as Pensions Companies, published in the Official Gazette No dated July 12, 28. July 24, 29: Circular on Projected Accumulation and Decumulation Charts to be used for Individual Pension System (Circular No: 29/1) annuls the Circular on Principles Applicable to Projected Accumulation and Annual Revenue Charts to be used for Individual Pension System (Circular No: 23/4), and defines the rules to be taken into consideration in preparing accumulation and decumulation projection charts to be developed by pension companies in order to inform participants. July 31, 29: Regulation on Amendments to the Regulation on Establishment and Operating Principles for Pension Companies amends provisions of the relevant regulation governing documents required from real persons acting as founders for establishment licenses and documents which should be submitted to the Undersecretariat of Treasury prior to appointment of executives. August 29, 29: Individual Pension Intermediaries Regulation redefines qualifications sought for individual pension intermediaries, participation in complementary trainings, license cancellation, etc. and introduces cancellation of sale permit for those who do not participate in complementary trainings. October 6, 29: Circular on Individual Pension Intermediaries (Circular No. 29/15) revokes Circular on Individual Pension Intermediaries No. 28/16 and redefines examination subjects as well as terms and conditions on identification cards. SECTOR DECLARATIONS March 23, 29: Sector Declaration on Exercising of the Right to Transfer Pension Accounts in Individual Pension System (Declaration No. 29/8) explains principles that pension companies must follow to avoid problems observed in transferring accounts, and the role of individual pension intermediaries in the enjoyment of the right to transfer. May 5, 29: Sector Declaration on Forms Presented to Participants in Individual Pension System (Declaration No. 29/15) amends some of the documents to be presented to participants and provides clarifications regarding the issues to be observed during the use of such documentation. March 1, 29: Regulation on Amendments to the Regulation on Principles of Insurance Independent Audit amends appendices to the Regulation on Principles of Insurance Independent Audit, published in the Official Gazette No dated July 12, 28. March 23, 29: Circular on Ratification of Pension Plans and the Electronic Plan Identification System (Circular No. 29/3) clarifies issues pertinent to the electronic plan identification system developed at Pension Monitoring Center, and ratification of plans.

83 Individual Pension System 29 Progress Report Sectoral Activities Working parties established in the past years continued their efforts during 29. The Communication Committee continued its work in presenting the system to more people. The message that small savings would incrementally grow and reach significant amounts at the retirement phase was given out to the public through television channels, movies and magazines within the framework of a media plan. At the end of the year, a press conference was held due to the sixth anniversary of the system, whereby figures reached by the year-end and expectations from the future were shared. To this end, a new media program spanning approximately two months was also implemented at the end of the year. Within the framework of this program, mass media, including television, radio, Internet and newspapers, was utilized. This year, the Technical Committee conducted studies particularly on programmed withdrawal and annuities as options of withdrawal at the phase of retirement, group individual contracts, projected accumulation and decumulation charts. Problems in the course of implementation were discussed at a joint platform, where consensus is formed in determination of problems and proposals for solution. The Legal Committee continued their efforts for solutions to the legal issues faced in the course of implementing the legal framework, contributing to the improvement of uniform implementations within the sector. The Financial Committee continued their actions on the common financial issues and problems encountered by pension companies. The results of the study started in 28 about the tax related aspects of transfers of pension related amounts from associations, foundations, provident funds and other companies to the individual pension system was communicated to the Ministry of Finance Revenue Administration at the beginning of 29. International Publications on 5.3 Private Pension Systems Selected publications on private pensions of international organizations, particularly Organization for Economic Cooperation and Development (OECD), issued in 29 are detailed below. OECD Publications and Reports Private Pensions Outlook 28 As the importance of private pension systems grows, the need to monitor their development and performance also increases. This first edition of the publication looks into the impact of the financial crisis on private pension systems, and provides indepth analyses of private pension arrangements across OECD and some non-oecd countries. In addition to official statistics on assets, investments and membership, it addresses trends shaping the private pension industry, based on the role of the private pensions in relation to the public pension systems. Financial Market Trends, No Financial Market Trends, one of the periodicals of OECD, provides a six-monthly update of trends and prospects in the major local and international financial markets. A section of No. 96, entitled Pensions, Ageing and Financial Markets, includes three separate papers analyzing the effects of the crisis on private pension systems. Private Pensions and Policy Responses to Financial and Economic Crisis This study report presents conclusions of the representatives of OECD and International Organization of Pension Supervisors (IOPS), convening with a view to evaluating policy responses to the financial and economic crisis in the light of international principles and good practices, on the importance of private pensions as a complement to public pension systems, protection of pension systems, achievement of sustainability in funding, improvement of management and supervision. Investment Regulations and Defined Contribution Pensions The paper assesses the impact of different quantitative approaches to regulate investment risk on the retirement income stemming from defined contribution pension plans. It analyses how such regulations affect investment policies and how they affect the retirement incomes of individuals. 28 Investment Regulation of Pension Funds This survey describes quantitative investment regulations on pension funds in OECD and selected non-oecd countries as of end December 29. The information collected concerns all forms of quantitative portfolio restrictions applied at different legal levels. World Bank Publication Pensions at a Glance: Asia Pacific As a result of the changing structure of pension systems, classifying these systems and retirement income schemes is becoming difficult. Perhaps the most well known of these classifications, is the five-pillar taxonomy of the World Bank. This report does not focus on all of the five pillars, but comparatively analyzes mandatory retirement schemes of only first and second pillars. Countries analyzed include China, Hong Kong, Indonesia, Malaysia, Philippines, Singapore, Thailand, Vietnam, India, Pakistan and Sri Lanka.

84

85 6 Selected Topics in the Individual Pension System 6.1 Analysis of Projected Accumulation and Withdrawal in Retirement 6.2 Selected Results of Surveys Conducted at PMC Contact Center

86 84 Individual Pension System 29 Progress Report SELECTED TOPICS IN THE INDIVIDUAL PENSION SYSTEM 6.1 Analysis of Projected Accumulation and Withdrawal in Retirement Changing standards of living and financial problems are inevitable risks for every individual in the retirement. Improved living conditions and advanced medicine have prolonged life expectancies of individuals. However, this brings forth the necessity of managing financial assets in retirement and protecting assets against the risk of living longer. In a financial environment, which evolves and becomes increasingly complicated, protecting pension savings at least against inflation and making right investments become even harder at older ages. Another potential risk at older ages is the loss of the spouse. Since men have shorter life expectancies than women, surviving wives come up against the risk of financial problems and inability to maintain existing living standards due to the decreased or ceased income, in case of the death of the husband. Outstanding loans and other continuing payments, costs of education and/or building a future as may be needed by the children are just a few financial issues likely to cause distress for the living members. With the extended life expectancy, unanticipated health and medication expenses increase, while rest home or home care and regular medication costs reduce individuals savings, lowering their life standards. The individual pension system, fully based on a voluntary basis, has been developed to enable individuals to invest their savings made during their active working lives, and enjoy a supplementary income in retirement, which would help them maintain their standards of living. This system is based on transferring a certain proportion of the earnings during the working life to the individual pension account, and investing in pension funds with variable levels of risk and returns to be determined by the participant. Since the individual pension system does not cover risks such as death and disability, the contributions paid by the participants are directed to investment within two business days after plan specific charges, if applicable, are deducted. Pension mutual funds are managed by professional portfolio management companies within the framework of portfolio management principles. By the nature of the system, the total accumulation to be achieved by each individual would differ depending on the contributions invested per their own investment choices. The retirement incomes would also vary depending on the total accumulation of the individual. Participants become eligible for retirement after they turn the age of 56, provided that they have stayed in the individual pension system for at least ten years, and paid contributions for ten years. The participant is free to enjoy access to her pensions as from the date of entitlement, or defer the retirement to a later date. If a participant had contribution holidays during the term of the contract, duration of such suspension may be taken into consideration in calculating the period of time required for retirement, only if a payment is made for the suspension period based on the minimum contribution amounts applicable as of the current date, provided that the participant is 56 years old and has been within the system for at least ten years. The participant entitled to retirement may choose a partial or a complete repayment of her accumulations held in the individual pension account, or a programmed withdrawal of the accumulated amounts in a schedule, or request a regular pension under a separate annuity contract. The participant opting for programmed withdrawal of the accumulations may request a scheduled repayment by remaining within the individual pension system. In this option, the whole or a part of the participant s accumulation is transferred to a pension scheme created by the company under a programmed withdrawal plan through an amendment, and thus remains within the system and continues to gain value. On the other hand, the participant s right to withdraw all of the accumulations at any time is reserved. The participant remains free to exercise her rights to change the fund distribution and transfer funds to another pension company, for the remaining accumulations. Annuities are regular payments made to the insured or their beneficiaries for a lifetime or certain periods of time, in return to a lump sum premium paid at the beginning of the period. The payments begin immediately or after a given period of time, provided that the insured is alive. Purchasing an annuity contract is converting the whole or a part of the after-tax accumulations in an individual pension account to a regular income payable for the lifetime or a period of time to be set by the insured. The insurance company undertakes the risk of living excessive ages for the insured and managing investments in return for a charge to be deducted off the premium of the annuity. To respond to different needs of individuals, diverse annuity products with distinct features may be designed. While the individual may purchase the annuity for himself only, she may choose to purchase products that would resume payments to the spouse at a rate to be determined in case of her death. Products with guarantee periods to protect living relatives in the event that the insured dies shortly after the annuity contract has been purchased may also be used. For such products, if the death occurs within the guarantee period, pension is paid to the beneficiaries until the end of such period. Annuity may be purchased either from the pension company with which the participants holds her individual pension account, or from another company offering different prices and opportunities. In a competitive environment created by the open market, products offering higher pensions for the same amount

87 Individual Pension System 29 Progress Report 85 of accumulation under the same conditions may be available. In the following example, intended as a future projection to allow for a comparison in respect of the individual pension system, we consider a participant at the age of 3, who joins the individual pension system with a regular monthly contribution of TL 115 and makes regular payments to the system for 27 years, making a contribution rise of 5% every year on real basis. This participant would have a probable fund accumulation of TL 148,93 when she becomes entitled to retirement at the end of the 27th year, when she is at the age of 56. If the individual chooses to receive a monthly repayment through a 2-year programmed withdrawal schedule, she would receive a probable monthly repayment of TL 1,14 (with today s purchasing power) for 2 years, and her remaining accumulation would continue to be invested in the funds selected by her. In the decumulation phase, the participant shall have the rights to receive the remaining accumulation at once before the determined time, or change the funds and company within the individual pension system. If the participant dies within the programmed withdrawal period, the remaining accumulation would be paid to the beneficiaries. The box shows the changing accumulation of the assumed participant in the pension account over periods of accumulation and retirement by the age of the participant. The example above assumes an inflation-free environment, and a yearly 5% contribution rise is applied on real basis to the paid contributions for the duration of the contract. It is assumed that no entrance fee is collected while joining the system, but an administrative expenses fee of 4% is deducted from the paid contributions. Assuming that the amount invested in funds has gained a probable return of 6% on real basis, the probable accumulation by the age of 56 is calculated. Benefiting the tax discount offered by the system, the participant would have obtained a tax return of TL 18,861 excluding TL 75,443 invested, assuming that the average of the tax brackets she would be included in during the accumulation period is 25%. It is assumed that the accumulation would also enjoy a possible return of 6% on real basis during the decumulation phase. In case the assumed participant chooses to terminate her individual pension contract at the end of the 27th year, when she is entitled to retirement, and purchase an annuity contract responsive to her needs with her accumulation, she may purchase an annuity contract with TL 143,319, which is the net Periods of Accumulation and Programmed Withdrawal In the following example intended as a future projection to allow for a comparison in respect of the individual pension system, a participant, who joins the individual pension system at the age of 3 with a regular monthly contribution of TL 115 and, making a contribution rise of 5% on real basis every year, was taken into consideration. This participant would have a probable fund accumulation of TL 148,93* when she becomes entitled to retirement at the end of the 27th year, when she is at the age of 56. She shall receive a tax return of TL 18,861 during the accumulation period, apart from the accumulation. If the individual wishes to receive a monthly repayment through a programmed withdrawal for 2 years without opting out of the system, she would receive a probable monthly repayment of TL1,14 for 2 years, and meanwhile her remaining accumulation would continue to be invested in funds according to her preference. Projected Accumulation in the Pension Account (' TL) Cumulative Return (TL) Tax Advantage Effect compared to Accumulation (TL) Actual out-of-pocket Investment (TL) Accumulation Phase Remaining Accumulation with a 2-Year Programmed Withdrawal (TL) Age Decumulation Phase * Individual Pension System is a long term savings and investment system. The final accumulation will depend on the contributions paid, time spent in the system, deductions of the scheme and the performances of selected funds. Here, a sample amount is depicted as a projection and is in no ways a promise or a guaranteed return. Source: emeklilik.egm.org.tr

88 86 Individual Pension System 29 Progress Report SELECTED TOPICS IN THE INDIVIDUAL PENSION SYSTEM after a withholding tax of 3.75% is deducted from her probable fund accumulation of TL 148,93. In the following annuity product examples, intended as a future projection to allow for a comparison in respect of the individual pension system, monthly pension amounts, which would be paid to the participant from the annuity to be purchased in accordance with her different needs, have been calculated. Amounts are provided so that they remain fixed in respect of today s purchasing power. The participant would be entitled to: A monthly income of TL 911 payable for 2 years or until death of the insured within 2 years A monthly income of TL 754 payable to the insured or 75% of that amount to the insured s spouse in case of insured s death for 26 years A monthly income of TL 746 payable during insured s lifetime A monthly income of TL 689 payable for 21 years or until death, with the first 5 years guaranteed to be paid to the beneficiaries in case of insured s death. average of 4% annual return would be achieved in funds on real basis. In annuities, the interest rate (probable rate of return) used in technical calculations subject to the nature of the insurance is the rate of return guaranteed by the insurance company to the insured until the end of the insurance period. Therefore, in calculating annuity examples, a more conservative probable rate of return than the one used in the example of the programmed withdrawal was used. The graph shows the probable monthly income alternatives of the assumed participant when she is entitled to retirement at the end of 27th year, if she chooses a systematic repayment of her accumulation without opting out of the system or if she chooses to terminate her contract within the individual pension system, and purchase an annuity contract responsive to her needs with the accumulation she is entitled to.* Examples are calculated on the assumption that the company deducts a 2% charge of the total annuity premium, and an Alternatives in the Decumulation Phase 1,1 Projected Monthly Income (TL) (with today's buying power) 1, Projected Monthly Income with 2-Year Programmed Withdrawal Annuity Paying Until the end of 2th Year or Death Annuity Paying Full Until the end of 26th Year or 75% to Spouse in case of Insured's Death Pure Life Annuity Annuity Paying First 5 Years Guaranteed, Until the end of 21th Year or Death Age Shows the age at which payments will cease although the insured is still alive The payment will surely be made to the person or beneficiary The payment will cease in case of death * The figures above are only probable future projections and are given in order to compare similar amounts with the ones in the individual pension system. They in no way present a commitment or guaranteed returns.

89 Individual Pension System 29 Progress Report 87 Selected Results of Surveys 6.2 Conducted at PMC Contact Center Article 14 of the Regulation on Operating Principles of Pension Monitoring Center provides that Pension Monitoring Center may carry out surveys, polls, research and other studies by contacting directly or indirectly with participants, individual pension intermediaries, other concerned persons, authorities and organizations. Based on this assignment, the EGM Contact Center was set up within Pension Monitoring Center in October 28 to have direct contact with participants and intermediaries. This center continued their information and assurance calls in 29 with a view to improving the individual pension system and taking necessary actions as well as ensuring that individuals could make the best use of this system. In this regard, utilization of the tax incentive was investigated; new participants joining in the system, those who have suspended their contributions or withdrawn from the system at their own discretion were selected by way of sampling; surveys were conducted with them; and obtained results were shared with the public, pension companies, and corresponding public authorities. In 29, EGM Contact Center conducted a study investigating into the pre-retirement withdrawals, which could pose a potential risk to the individual pension system. 2,777 individual participants who have opted out of the system by their own decision were randomly selected, and asked to respond to survey questions intended to look into their motives for joining and withdrawing from the system. Accordingly, approximately 72% of the individuals opting out of the system were found to withdraw because they need the accumulated amounts. The second most important reason -by 6%- was inadequate information or misinformation. Losing trust in the system or dissatisfaction with the company accounted for 6% of all withdrawals -by 3% each. As evident from these results, a vast majority of withdrawals are associated with financial reasons, and accumulations at the individual pension system, which is a long-term saving and investment instrument, are used for shortterm needs. When the reasons for joining the individual pension system were investigated through questions posed to the same sample, it was found that the two most important reasons were making savings (48%) and receiving additional income in retirement (39%). It is possible to say that this result is consistent with the initial result. Participants mention the ability to make savings as the first reason to join the individual pension system, while they tend to use the savings in the system once adequate accumulations are established. When participants who have withdrawn were asked whether they would consider joining the system again, 61% of them said that they were willing to re-enter the system, with 51% planning this in the long run (6 months or later), and 1% in the short run. On the other hand, 39% of the responding participants said that they would not consider joining the individual pension system again. Causes of Withdrawals* In Need of the Cash Buildup 71.6 Biased or Unsufficient Discosure Fund Returns Unattractive System not Suitable for the Individual Lack of Confidence to the System Displeasure with the Pension Company Long term Nature of the Investment No Answer/Other Percentage * The sample consists of 2,777 participants, who have withdrawn out of the system in 29.

90 88 Individual Pension System 29 Progress Report SELECTED TOPICS IN THE INDIVIDUAL PENSION SYSTEM Expectations in Entering the Individual Pension System Savings 48.2 Supplementary Income at Retirement 38.5 Due to Recommendation 5.3 Safe Instrument 3.8 Tax Advantage 1. Other Ratio of Answers (%) Withdrawn Participants Consider Re-entrance In a survey conducted in 29 with 2,777 participants who have withdrawn from the system, 61% of them said that they were willing to re-enter the individual pension system, while the remaining 39% said that they did not consider joining the system again. 51% of these individual contract holders considered re-entry in the long run, while 1% said that they would re-join in the short run. In accordance with this, an analysis of the individual pension system data shows that about 1% of the participants having withdrawn from the individual pension system have joined the system again. Would Consider Rejoining in the Long Run 51.2% Would Consider Rejoining in the Short Run 9.6% Would Never Consider Rejoining 39.3%

91 Individual Pension System 29 Progress Report 89 Usage of Tax Advantage for Withdrawn Participants Feels no Need 18.2% Other %14.1 Used the Tax Advantage 24.2% Does not Know how to Use 43.5% Finally, an analysis of the use of tax incentives by those individual contract holders who have withdrawn from the system prematurely reveals that 24% of them have benefited the incentive. When this percentage is compared to the use of tax incentives by those individual contract holders who continue saving in the system, which is 33%, the utilization by the withdrawing participants seems to be 9 points lower (Individual Pension System 28 Progress Report, page 82). In regard to the use of the tax incentive, significant differences are observed between participants remaining in the system and those withdrawing from the system. Considering this, it may be conjectured that the more the tax incentive is used, the lower the possibility of withdrawals get.

92

93 7 Pension Companies Almanac

94 92 Individual Pension System 29 Progress Report PENSION COMPANIES ALMANAC Pension Company Contact Details AEGON EMEKLİLİK VE HAYAT A.Ş. Headquarters Address Abide-i Hürriyet Cad. Bolkan Center No: 211 K: Şişli, İSTANBUL Telephone, Fax (212) , (212) WEB Site Total Capital (TL) 75.. Name and Share of Shareholder AEGON TURKEY HOLDING B.V. %1, Name and Share of Shareholder AEGON WONINGEN NOVA B.V. %, Name and Share of Shareholder AEGON INTERNATIONAL B.V. %, Name and Share of Shareholder USFH - NEZAM B.V. %, Name and Share of Shareholder AEGON TSJECHIE HOLDING B.V. %, Name and Share of Shareholder Name and Share of Shareholder Executive Staff Chief Executive Officer Dr. Gabor Tibor KEPECS Deputy Chief Executive Officer Michal Kazimierz BIEDZKI Members Venelin Angelov YANAKIEV, Peter Zoltan MAHIG, Gabor Andras HAVAS, Uğur TOZŞEKERLİ General Manager Uğur TOZŞEKERLİ Telephone, Fax (212) , (212) Address [email protected] Date of Appointment July 3, 28 Assistant General Managers Zeka BİRMAN, Cenk GÜRER, Tankut EREN Date of Pension Operation License August 1, 23 Pension Company Contact Details AVIVASA EMEKLİLİK VE HAYAT A.Ş. Headquarters Address Saray Mah. Küçüksu Cad. Akçakoca Sok. No: Ümraniye, İSTANBUL Telephone, Fax (216) , (216) WEB Site Total Capital (TL) Name and Share of Shareholder AK SİGORTA A.Ş. %49,83 Name and Share of Shareholder AVIVA INTERNATIONAL HOLDINGS LIMITED %49,83 Name and Share of Shareholder OTHER %,34 Name and Share of Shareholder Name and Share of Shareholder Name and Share of Shareholder Name and Share of Shareholder Executive Staff Chief Executive Officer Hakan AKBAŞ Deputy Chief Executive Officer Andrea MONETA Members Turgay ÖZBEK, Ertan FIRAT, Adam Jack USZPOLEWICZ, Zafer KURTUL, Meral EGEMEN General Manager Meral EGEMEN Telephone, Fax (216) , (216) Address [email protected] Date of Appointment October 31, 27 Assistant General Managers Date of Pension Operation License July 7, 23 Ömer KARA, Selim AVŞAR, Mustafa Fırat KURUCA, Ali Önder LÜLÜ

95 Individual Pension System 29 Progress Report 93 ALLIANZ HAYAT VE EMEKLİLİK A.Ş. ANADOLU HAYAT EMEKLİLİK A.Ş. Bağlarbaşı Kısıklı Cad. No: İş Kuleleri Kule 2 Kat: Altunizade, İSTANBUL Levent, İSTANBUL (216) , (216) (212) , (212) ALLIANZ GROUP %86, TÜRKİYE İŞ BANKASI A.Ş. %62, TOKIO MARINE AND NICHIDO FIRE INSURANCE CO. LTD. %11, ANADOLU ANONİM TÜRK SİGORTA ŞİRKETİ %2, ALLIANZ SİGORTA A.Ş. %2, HALKA ARZ %16, OTHER %1, FORTISBANK A.Ş. %1, MİLLİ REASÜRANS T.A.Ş. %1, Dr. Rüşdü SARAÇOĞLU Mahmut MAGEMİZOĞLU Enrico CUCCHIANI Serdar GENÇER Klaus DUHRKOP, Cemal ZAĞRA, Candemir ÖNHON, M. Kemal OLGAÇ, Lorella SDRIGOTTI, Tadaharu UEHARA, George David SARTOREL Mete UĞURLU, A. Yavuz EGE, Yalçın SEZEN, Salih KURTULUŞ, Emre DURANLI, A. Erdal ARAL, Nilgün İSKENDER George David SARTOREL (Deputy General Manager) Mete UĞURLU (216) , (216) (212) , (212) [email protected] [email protected] February 1, 27 January 3, 26 Ahmet TURUL, Arif AYTEKİN, Ayşegül OKTAY, Ömür ŞENGÜN, Solmaz ALTIN Afşin OĞUZ, Uğur ERKAN, Engin Murat YÜKSEL, Oğuz Haluk SOLAK, Orhan BOZKURT August 1, 23 July 7, 23 DENİZ EMEKLİLİK VE HAYAT A.Ş. ERGOİSVİÇRE EMEKLİLİK VE HAYAT A.Ş. Salih Tozan Sok. Karamancılar İş Merkezi No: 16 A Blok Tophanelioğlu Cad. İsmail Zühtüpaşa Konağı No: Esentepe, İSTANBUL Altunizade, İSTANBUL (212) 37 15, (212) (216) 544, (216) DENİZBANK A.Ş. %99,86 ERGO GRUBU HOLDİNG A.Ş. %1, EURO SİGORTA A.Ş. %,1 Andreas Matthias KLEINER %, Ayla TOPRAK %,1 Thomas Herbert SCHÖLLKOPF %, Yeşim TOPRAK %,1 Dr. Jochen Karl Friedrich MESSEMER %, Sevgi TOPRAK TUNGA %,1 Rainer Marcus HUBER %, Dirk G. M. BRUNEEL Gökhan ERTÜRK Gökhan SUN, Murat ÇELİK, Jimmy HENDRICKX, R. Deniz YURTSEVEN Mehmet Akın KOZANOĞLU Wolf Dieter SCHMIDT-AHRENDTS Juergen Peter SCHMITZ, Sedef KORKMAZ, Recep AKKAYA R. Deniz YURTSEVEN Recep AKKAYA (212) , (212) (216) , (216) [email protected] [email protected] March 3, 27 April 27, 29 Jimmy HENDRICKX, Fatih ÇELİK İ. Sabri ERDEM May 21, 29 August 2, 28

96 94 Individual Pension System 29 Progress Report PENSION COMPANIES ALMANAC Pension Company Contact Details FİNANS EMEKLİLİK VE HAYAT A.Ş. Headquarters Address Sahrayıcedit Mah. Halk Sok. No: 48 Kozyatağı Kadıköy, İSTANBUL Telephone, Fax (216) 468 3, (216) WEB Site Total Capital (TL) 3.. Name and Share of Shareholder FİNANSBANK A.Ş. %1, Name and Share of Shareholder FİNANS PORTFÖY YÖNETİM A.Ş. %, Name and Share of Shareholder FİNANS FİNANSAL KİRALAMA A.Ş. %, Name and Share of Shareholder FİNANS YATIRIM MENKUL KIYMETLER A.Ş. %, Name and Share of Shareholder Mustafa Hüsnü ÖZYEĞİN %, Name and Share of Shareholder Name and Share of Shareholder Executive Staff Chief Executive Officer Mehmet Ömer Arif ARAS Deputy Chief Executive Officer Doukas Pavlos PALAIOLOGOS Members Yener DİNÇMEN, Avraam MOISSIS, Adnan Menderes YAYLA, Temel GÜZELOĞLU, Ajlan SÖZÜTEK General Manager Ajlan SÖZÜTEK Telephone, Fax (216) , (216) Address [email protected] Date of Appointment July 17, 27 Assistant General Managers Aşkın DÜŞÜNDERE, Tülay AKOVA, Ayfer SALTAN Date of Pension Operation License April 11, 28 Pension Company Contact Details GROUPAMA EMEKLİLİK A.Ş. Headquarters Address Groupama Plaza Eski Büyükdere Cad. No: Maslak, İSTANBUL Telephone, Fax (212) , (212) WEB Site Total Capital (TL) Name and Share of Shareholder GROUPAMA INTERNATIONAL SA %37,38 Name and Share of Shareholder GROUPAMA SİGORTA A.Ş. %43,5 Name and Share of Shareholder GROUPAMA INVESTMENT BOSPHORUS HOLDING A.Ş. %1,2 Name and Share of Shareholder T.C. ZİRAAT BANKASI PERSONEL VAKFI %9,1 Name and Share of Shareholder Jean-Rene, Gerard, DE CHARETTE DE LA CONTRIE %, Name and Share of Shareholder TAREKS-TARIM ÜRÜNLERİ ARAÇ GEREÇ İTHALAT VE İHRACAT A.Ş. %, Name and Share of Shareholder M. Emin ATASAGUN %, Executive Staff Chief Executive Officer Pierre Paul Joseph Leon Marie Ghislain LEFEVRE Deputy Chief Executive Officer Mehmet AYDOĞDU Jean-Rene, Gerard, DE CHARETTE DE LA CONTRIE, Members Gérard Jean Henri Michel JOALLAND, Jean-Louis Henri Jules LAFFRAT, Alain Andre Felix BRUNET, Mümin AKYOL, Christian Louis COCHENNEC, Cüneyt GENÇ, Ali Yılmaz YILDIZ General Manager Ali Yılmaz YILDIZ Telephone, Fax (212) , (212) Address [email protected] Date of Appointment January 1, 21 Murat Levent ÖZER (CFO), Anne Gabrielle Marie AYDIN (General Secretary), Assistant General Managers Gündoğdu Şenol ÜNEN, Philippe Jean Daniel Antoine GIRAUDEAU, Ramazan ÜLGER Date of Pension Operation License August 1, 23

97 Individual Pension System 29 Progress Report 95 FORTIS EMEKLİLİK VE HAYAT A.Ş. GARANTİ EMEKLİLİK VE HAYAT A.Ş. Eski Büyükdere Cad. No: 29 Tekfen Tower Mete Cad. No: Levent, İSTANBUL Taksim, İSTANBUL (212) , (212) (212) 334 7, (212) FORTIS INSURANCE INTERNATIONAL %1, T. GARANTİ BANKASI A.Ş. %84,91 FORTIS INSURANCE N.V. %, EUREKO BV. %15, SYCAMORE INSURANCE 2B.V. %, OTHER %,9 Sema AKÇA %, Barend van DAM %, Stefan G. L. BRAEKEVELDT Ergun ÖZEN Gökhan ERÜN Barend van DAM, Stefan G. L. BRAEKEVELDT, Sema AKÇA, Bary Duncan SMITH, Nazif Orhan PAMİR Jan NİJSEN, Hayrullah Murat AKA, Muammer Cüneyt SEZGİN, Ali Fuat ERBİL, Mehmet SEZGİN, Erhan ADALI, Faruk Nafiz KARADERE Barend van DAM Erhan ADALI (212) , (212) (212) , (212) [email protected] [email protected] August 1, 27 September 19, 25 Sema AKÇA, Nazif Orhan PAMİR, Mehmet Sinan ERİŞEN Cemşit TÜRKER, Ömer MERT, E. Yasemen KÖNE, Ahmet KARAMAN August 26, 23 July 7, 23 ING EMEKLİLİK A.Ş. VAKIF EMEKLİLİK A.Ş. Arapcami Mah. Tersane Cad. No: 5 Karaköy 3442 Muallim Naci Cad. No: Beyoğlu, İSTANBUL Beşiktaş, İSTANBUL (212) 334 5, (212) (212) 31 37, (212) ING CONTINENTAL EUROPE HOLDINGS B.V. %99,99 T. VAKIFLAR BANKASI T.A.O %53,9 OTHER %,1 (ING Verzekeringen Intertrust II BV- ING GÜNEŞ SİGORTA A.Ş. %37, Verzekeringen Intertrust III BV- ING Verzekeringen Intertrust IV VAKIF YATIRIM MENKUL DEĞERLER A.Ş. %8, BV- ING Verzekeringen Intertrust V BV) VAKIFBANK PERSONELİ ÖZEL SOSYAL GÜVENLİK HİZMETLERİ VAKFI %1, OTHER %,1 Violeta CIUREL John Thomas McCARTHY Reigt Hein KLIPHUIS, Tankut Taner ÇELİK, Bram BOON, Jonkheer Floris Ferdinand Van SPENGLER Yusuf BEYAZIT M. İlker AYCI Feyzi ÖZCAN, Ramazan GÜNDÜZ, Recep ÖZEL, Yusuf YEŞİLIRMAK Jonkheer Floris Ferdinand Van SPENGLER (Deputy General Manager) Yusuf YEŞİLIRMAK (212) , (212) (212) , (212) [email protected] [email protected] September 3, 29 November 1, 24 İhsan ÇEVİK, Süleyman Sarper EVREN Tamer MERT, Onur AVCI, Fahrettin BAYRAKTAR July 7, 23 August 1, 23

98 96 Individual Pension System 29 Progress Report PENSION COMPANIES ALMANAC Pension Company Contact Details YAPI KREDİ EMEKLİLİK A.Ş. Headquarters Address Yapı Kredi Plaza A Blok Büyükdere Cad Levent, İSTANBUL Telephone, Fax (212) , (212) WEB Site Total Capital (TL) 58.. Name and Share of Shareholder YAPI KREDİ SİGORTA A.Ş. %99,93 Name and Share of Shareholder OTHER %,7 Name and Share of Shareholder Name and Share of Shareholder Name and Share of Shareholder Name and Share of Shareholder Name and Share of Shareholder Executive Staff Chief Executive Officer Tayfun BAYAZIT Deputy Chief Executive Officer Alessandro M. DECIO Members Doç. Dr. S.Giray VELİOĞLU (Executive Director), H. Faik AÇIKALIN, Ahmet Fadıl ASHABOĞLU, Marco CRAVARIO, Taylan TÜRKÖLMEZ General Manager Taylan TÜRKÖLMEZ Telephone, Fax (212) , (212) Address [email protected] Date of Appointment May 1, 29 Assistant General Managers Umur ÇULLU, Dr. S. Bülent ERİŞ Date of Pension Operation License July 7, 23 Part of this report may be published without permission of PMC with the condition of granting the respective reference to the authors. The commercial use of the data herein is subject to the written approval of PMC. PMC shall not be liable for any errors or shortages due to the errors or shortages in supplied data, information gathered from outside sources, or any kind of printing mistakes. Sarıkanarya Sokak No:18 Yolbulan Plaza A Blok Kat: 1 Kozyatağı/İstanbul Ph: (216) Fax: (216)

99

100 Sarıkanarya Sokak No:18 Yolbulan Plaza A Blok Kat: 1 Kozyatağı/İstanbul Ph: (216) Fax: (216)