Billions of Turkish liras that have accumulated in the Individual Pension System (IPS) will be used as funds in the real sector's investments in research and development (R&D), housing and infrastructure projects.
As a part of the plans to use the funds accumulated in the IPS in Turkey's hi-tech investments, the government aims to increase the number of individuals participating in the system and the money accumulated in it.
Currently, there are 6 million participants and a fund of TL 47 billion ($15.6 billion) accumulated in the system. With a practice called "automatic participation," which the Treasury will initiate in June, IPS funds are aimed to exceed TL 400 billion by 2023.
Delivering a presentation on the matter at the Presidential Palace a couple of days ago, Vakıf Emeklilik General Manager Mehmet Bostan said the government put the automatic participation on its agenda, and the practice will be firstly applied to large-scale companies and then to small and medium-sized enterprises (SMEs).
Stressing that the 25 percent state subsidy will continue for automatic participation, Bostan said the practice will lend a great impetus to achieving the objective of covering hi-tech investments from IPS funds. The implementation is also expected to support capital markets. Bostan said if Turkey makes an amendment on the regulation about the use of IPS funds in real sector investments, current dependency on banks will decline by half.