BRIEF INFORMATION

Information for Private Pension Fund Shares

Since 2003, Takasbank has been serving as a custodian to private pension companies and, pursuant to the relevant legislation, the fund shares of the participants are monitored by Takasbank on beneficial-owner basis in a way that participants can monitor. Participants of the private pension system can check the amount of funds transferred to their accounts together with the existing fund values and market values by linking to the "Private Pension" shortcut on the main page of our website by using their e-government passwords. In addition, participants will be able to request for balance changes in their account by using text messages and/or email as well as monthly balance changes and monthly fund amount information by email by using the "Information Transactions" section by linking to the "Private Pension" shortcut.

Private Pension Fund Shares Management

Takasbank has been providing services in its capacity as a custodian to private pension companies since 2003 in accordance with Article 17 of the Private Pension Savings and Investment System Law No. 4632 dated April 7, 2001, and articles 28, 29 and 31 of the Regulation on the Principles Regarding the Establishment and Operations of Private Pension Funds issued by the Capital Markets Board and published in the Official Gazette dated February 28, 2002.

In summary, the Private Pension Fund Shares Management Service; involves opening sub-accounts at Takasbank for the participants of the private pension system,creation of private pension fund shares, distribution thereof to participants' sub-accounts as well as providing their custody, monitoring amount and fund shares of state contributions and fund shares separate from the contribution payments, processing lien requests from appropriate authorities related to the participants' private fund shares and allocation of a Takasbank registration number to participants.

State Contribution Fund Shares Transactions

Article 1 of the annex titled "State Contribution" of the Law No. 4632 reads "...Government Contributions are monitored separately from contribution payments and are directed to investing in instruments specified by the Undersecretariat." In order for State Contribution fund shares to be held as "separate," a sub-account has been designated by Takasbank and these sub-accounts are exempt from seizures, liens and so on and shall not be considered in the calculation of the exempted amount as specified in the Law.

With the legislative amendment that became effective as of January 1, 2013, the government has initiated the practice of a 25% contribution for contribution payments of the private pension system participants. State contribution in connection with the relevant regulation is calculated by the PMC (Private Pension Monitoring Center) on the basis of information provided by companies to the PMC. Calculated State Contribution amounts are sent to the cash account of the PMC at Takasbank every month by the office of the Prime Ministry Undersecretariat of the Treasury of the Republic of Turkey. These amounts are transferred by Takasbank to the free cash accounts of individual pension companies in line with the instructions of the PMC. Private pension companies block these amounts on the same day in the "State Contribution" blocked cash account opened at Takasbank by the State Contribution fund. Blocked State Contribution cash amounts, in return for the fund shares transferred to the participants' accounts, are automatically released by Takasbank and transferred to the free accounts of the funds.

Private Pension Automatic Participation System

Law no. 6740 on the "Amendment to be Made to the Private Pension Savings and Investment System Law", regulating the automatic participation in the Private Pension System (PPS), was adopted on August 10, 2016, with an effective date designated as of January 1, 2017. The law aims at the automatic inclusion of retirees under the age of 45 in the PPS starting on January 1, 2017, with a pension contract to be specified by the employer. Employee contribution is determined as 3 % of the earnings that constitute the basis of social security institution premiums determined in Article 80 of the Law No. 5510, and this amount may be reduced by one-third by the Council of Ministers.

Fund shares generated by contracts such as the recently regulated "Automatic Participation Pension Contract" pursuant to Law No. 6740, will be maintained in different accounts opened on the Takasbank system and kept under custody therein, as distinct from fund shares generated by current voluntary-basis contract contributions.