The pension mutual fund is a mutual fund created to invest the contributions that are collected by the pension company under the pension contract and are managed in the individual pension accounts on behalf of the participants. Created by pension companies. Does not have a legal entity. Managed by portfolio management companies.
The type of the pension mutual funds is determined based on the investment instruments they contain; e.g. government bonds and bills, stocks, deposits, and so on. Pension mutual funds may be purchased only by those entering the IPS. Withholding tax shall not be apply to the returns from pension mutual funds. These funds are managed with long-term investment strategies.
You can invest in the funds you prefer without a minimum or maximum limit.
However, you can select among the funds as part of your plan and distribute between them within the stated limits. Pension plans may have investment limits in parallel with the fund's strategy according to the risk-return expectations of the target participants.
The accumulation in your individual 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. You can make a change request in writing, through the pension company's call center, or on the website by going to the secure page created on behalf of the participant, sponsor or employer, or via other electronic communication tools, including text message, email, internet, fax, and so on.
IPS does not offer any guarantees on return. You can select a pension mutual fund offered by the pension company with different risk and return levels to choose the fund that is most suitable to your risk profile.
If you do not make a selection among the IPS funds, your accumulations shall be invested in the Standard Fund.
Group Pension Mutual Fund is a type of fund that is created for certain businesses, occupations and industries, and on the condition of approval by the Capital Markets Board, to allocate the funds to certain persons or groups.
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.