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Individual Pension System 2016 Progress Report

Foreword

As of 2016, our private pension system has been in effect for 13 years, and it sets an example for many other countries
with its proven success in our country. The state contribution incentive that began in January 2013, sparked the
momentum, and in 2016 we soared to new heights. The rate of current growth was decidedly evident with the rise of
the number of participants to 6.62 million people, a 600,000-increase, from the start of 2016 to the end, and a surge of
13 billion Turkish lira in participants’ funds in a single year, which reached 61 billion Turkish lira from 48 billion Turkish
lira, including state contributions. This growth is an encouraging step for Turkey to reach its goals.

We attach high importance to the Private Pension System as it helps boost the national saving ratios, thus bringing in
long-term funds to our economy and capital markets and reducing the need for external financing. As such, it is vital
that reforms are implemented and the necessary steps are taken to advance the current system even further. The
Undersecretariat is conducting crucial work to that effect.

They integrated the automatic enrollment practice, which has succeeded throughout the world, into our private pension
system. Also in 2016, the Grand National Assembly of Turkey passed an amendment to a law on automatic enrollment
in the private pension system, effective January 1, 2017. We believe that the practice will play a great role, especially
in the medium- and long-term, in pushing domestic savings up, thus preventing a possible decline in purchasing power
during retirement age and promoting market depth.

In light of the system’s added value contribution to our country, there will more public support for the system in the
coming days to increase the system’s reach, create lasting trust, and achieve stable growth. Undoubtedly, accomplishing
all these goals requires all relevant parties to continue working together in harmony and with a shared vision.

The Undersecretariat of Treasury, along with relevant parties, aspires to accomplish great changes to improve and
develop the Private Pension System even further in 2017. I would like to take this opportunity to thank everyone for their
efforts in preparing the 2016 Private Pension System Annual Progress Report. I hope all our stakeholders and the private
pension system will benefit from the report, which is held in high regard by a number of private pension institutions and
organizations throughout the world.

Osman ÇELİK
Undersecretary of Treasury

We attach high importance to the Private Pension System as it helps boost
the national saving ratios, thus bringing in long-term funds to our economy
and capital markets and reducing the need for external financing.

7 Foreword