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

Fund Performance Assessment System

With the relevant legislation; The procedures and principles regarding instant monitoring of the return performance of pension mutual funds, rewarding the managers of the funds with relatively high returns during the evaluation period, and imposing sanctions on the managers of relatively unsuccessful funds have been regulated. The task of operating the aforementioned system has been entrusted to the Pension Monitoring Center (EGM), and it has been adopted that the following main issues are decided by the Fund Performance Evaluation Committee established at the EGM with the participation of the relevant stakeholders.

In this context;

  • Creating benchmark groups by ensuring that funds with similarities in asset allocation strategies, risk and title structures are included in the same group, comparing the return performance of the funds in the relevant benchmark groups with each other in terms of return performance, comparing the return performance of the funds that cannot be included in the benchmark groups with the benchmark return of the fund,
  • Fund comparison groups, funds that are not covered by the comparison groups and the assessment methodology related thereto, be decided and submitted to the Fund Performance Assessment Committee (FPAC) by the Pension Monitoring Center (PMC), and the method approved by the committee and the lists of funds be announced to the public,
  • Fund performance be monitored in real time by PMC, and performance measurement and assessment be conducted by the methodology announced to the public in the relevant performance period,
  • Performance results of the funds that are considered relatively successful or unsuccessful be announced to the public within 15 business days following the assessment period, by PMC,
  • Application of rewards or sanctions to fund managers according to the results of performance evaluation, announcement of the results to the public by the PMC

envisaged.

Basic Stakeholders of Fund Performance Monitoring and Assessment System, and Their Duties

The Ministry of Treasury and Finance

  • Making policies and strategies for the industry
  • Assessing the performance of funds, and giving opinions about the procedures and principles regarding the incentives and measures applicable to portfolio managers and sharing them with the Capital Markets Board of Turkey

The Capital Markets Board of Turkey (CMB)

  • Regulating and overseeing the operations of pension mutual funds
  • Assessing the performance of funds, and defining the procedures and principles regarding the incentives and measures applicable to portfolio managers

Pension Monitoring Center (PMC)

  • Ensuring that the Individual Pension System operates properly and securely, and protecting the rights and interests of participants
  • Overseeing the operations of pension companies, individual pension intermediaries and pension mutual funds
  • Defining and presenting to the FPAC the fund comparison groups to be included in the fund performance monitoring and assessment system, funds that are not covered by the comparison groups and performance assessment methods for them.
  • Announcing FPAC decisions to the founders of funds (pension companies), presenting the objections to the FPAC, submitting them to the CMB if an objection is not resolved, and announcing the final outcome to the public on the website
  • Monitoring and assessing the performance of all funds, and identifying and announcing the relatively successful and relatively poor performance funds each year
  • Making the notifications necessary for the funds to be rewarded or penalized, and following up the processes

Pension Companies (Fund Founders)

  • Ensuring that pension mutual funds are managed prudently and carefully, taking necessary internal control and audit measures
  • Submitting to the FPAC the objections related to the grouping and methodology as reported to them by PMC
  • Implementing the incentives and measures to the relevant portfolio management companies, following the notifications made by the PMC
  • Reporting recommendations for improving the system to the PMC

Portfolio Management Companies

  • Managing the funds carefully and prudently
  • Managing funds for maximum performance in full compliance with the legislation and internal regulations
  • Reporting recommendations for improving the system to the PMC

Fund Performance Assessment Committee (FPAC)

  • Making final decisions related to the fund comparison groups suggested by the PMC
  • Defining the performance assessment methodology for funds within the framework defined in the Pension Mutual Funds Guidelines (Guidelines)
  • Processing and resolving the objections or implementing suggestions made by pension companies

Private Pension Regulation and Supervision Authority (IPRSA)

  • To regulate and supervise the activities of pension companies, Pension Monitoring Center and individual pension intermediaries
  • Evaluating the performance of the funds and sharing with the CMB an opinion on the procedures and principles regarding the incentives and measures to be applied to portfolio managers as a result of these evaluations.