Voluntary Participation (IPS) Auto Enrollment System (AES) Funds Legislation Data Center

Auto Enrollment Funds

In the automatic participation system, pension companies offer interest and no-interest fund choices to their employees. The funds offered vary depending on the period that your certificate has remained in the system.

Fund Presentation Period Accumulation Investment Funds
For the duration of the initial period
(Plan entry notice + 2 months)
Initial fund
End of initial period + 10 months If employee does not make a choice Initial fund
If employee makes a choice standard fund or other funds
Plan entry notice + 1 year If employee does not make a choice standard fund
If employee makes a choice Initial fund or other funds

The accumulation in your auto enrollment pension account, and your paid contributions' distribution ratios and amounts between funds may be changed a maximum of twelve times per year. For each fund distribution change request, you can select a maximum of 20 funds, including funds offered through BEFAS.

No-interest IPS funds

The personal pension system provides pension mutual funds that are invested in no-interest instruments and are compliant with the Islamic finance rules and the participation banking principles for participants who are conscious about interest.

These no-interest funds are invested in the instruments that are approved by the relevant pension company’s Advisory Board, are deemed permissible in accordance with Islam, and are appropriate for no-interest and participation banking principles.

Financial instruments of no-interest pension mutual funds may briefly contain the following:

  • Participation accounts in Turkish lira, Euro or US dollar opened in participation banks,
  • No-interest Turkish lira, Euro or US dollar assets, and capital market instruments that do contain precious metals such as gold and silver,
  • Stocks that are suitable for the participation index and participation banking principles,
  • Gold and precious metals,
  • No-interest securities mutual funds (e.g., venture capital investment funds, real estate mutual investment, etc.),
  • No-interest bonds and bills such as sukuks (lease certificates) that are issued in Turkey or abroad.



Fund Details

Initial Fund

The pension company offers two initial funds; with and without interest, to invest your accumulations during the two-month withdrawal period. Companies that do not allow products that include interest can only offer the "no-interest" initial fund.
Additional performance-based fund management fee deduction is not made on the initial funds.
Allowed assets for investment of initial funds and investment limitations:

Initial fund with Interest
Allowed Assets for Investment Minimum Limit Maximum Limit
TL deposit and/or participation account %60 %80

Maximum 184-day maturity and/or 184 days to maturity in Turkish lira issued by the Undersecretariat

  • bonds and bills
  • revenue sharing certificates
  • rent certificates
%20 %40
  • Reverse repo
  • Istanbul Settlement and Custody Bank Inc. and/or domestic organized money market transactions
  • Promissory contracts
%0 %20


Initial fund without Interest
Allowed Assets for Investment Minimum Limit Maximum Limit
  • Participation accounts in Turkish lira
  • Maximum 184-day maturity or 184 days to maturity Turkish lira rent certificates traded in the stock market and issued by the banks
%60 %100
  • Promissory contracts
  • Maximum 184-day maturity and/or 184 days to maturity in Turkish lira issued by the Undersecretariat
  • revenue sharing certificates
  • rent certificates
%0 %40

Standard Fund

If at the end of one year you have remained in the automatic participation certificate, you can inform your pension company about your choice of continuing with the initial fund or moving into the other fund types.

If you do not inform the pension company about your preference, it shall complete your transition to a standard fund, depending on whether your initial fund is with or without interest.

Your pension company offers two standard funds, with or without interest.

Allowed assets for investment of standard funds and investment limitations:

Standard Fund
Allowed Assets for Investment Minimum Limit Maximum Limit

Issued by the Undersecretariat in Turkish lira

  • bonds and bills
  • revenue sharing certificates
  • rent certificates
%50 %90

Deposit and participation accounts in Turkish lira

%0 %40
  • Venture capital investment fund participation shares
  • Real estate investment fund participation shares
  • Capital market instruments issued by the companies established for the purpose of investing in the Turkey Wealth Fund and/or in infrastructure projects.
  • Capital market instruments approved by the Undersecretariat
%10 %50
Venture capital investment fund participation shares %1 %50
  • Reverse repo
  • Istanbul Settlement and Custody Bank Inc. and/or domestic organized money market transactions
  • Bonds and bills that are traded in the stock market and issued by the banks or other issuers with an investment-grade credit rating
  • Capital market instruments that are considered, due to their attributes, as bonds and bills by the Capital Markets Board of Turkey
  • Rent certificates of which the prospectus/issuance certificate is approved by the Board
  • Shares in the participation index calculated by the BIST 100, the BIST Sustainability Index, and the Borsa İstanbul A.Ş.
  • Precious metals
  • Capital market instruments based on precious metals
  • Investment fund participation shares
  • Stock market investment fund participation shares
  • Mutual fund shares, mortgages, and asset guaranteed securities
  • Mortgages and asset guaranteed securities
  • Intermediary and partnership warrants
  • Promissory contracts
  • Other investment instruments approved by the Undersecretariat
%0 %30
Reverse repo and Istanbul Settlement and Custody Bank Inc. and/or domestic organized money market transactions %0 %2

Other Funds to Offer to the Employees who Opt Out of the Initial or Standard Funds

In the automatic participation system, your pension company offers, in addition to the initial and standard funds, the funds with the following risk groups.

If you opt out of the initial or standard funds, your pension company will conduct a risk profile survey. Then, you can choose a fund offered based on this survey, or the most suitable interest-fund in the four different risk categories or among the two no-interest funds in the “Daring/Dynamic/Growth” and “Aggressive” risk categories.

The total number of variable funds cannot exceed eight: Four each "with" and "without" interest.


Investment Choices other than Initial and Standard Funds Risk Value*
Conservative/Cautious 1-2
Balanced 3-4
Daring/Dynamic/Growth 4-5
Aggressive 5-7