Workplaces That will Enter Into Private Pension Implementation in the New Year

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We would like to remind you that the workplaces employing 10 (Inc.) to 50 (Exc) personnel will start to enter into contracts with pension companies and offer pension plans to the employees as of 1^st January 2018.. 

As is known, Private Pension System, which is complementary to the mandatory state social security scheme in Turkey has been introduced by Law No. 6740 and entered into force as of 1st January 2017.

Turkish citizen employees who are under the 45 years of age and working against wage under a service contract (in the scope of Law No. 5510, articles 4/a, and 4/c) will be automatically enrolled in a pension plan arranged by employers. Participant employees may have the right of withdrawal from the system within two months.

We have already informed you of the new developments and outlines of Private Pension System in our recent article.

Now with the Cabinet Decree No. 2017/9721, dated 1 January 2017 following points are also clarified.

Gradual entrance for the workplaces

Workplaces will start to enter into contracts with pension companies and offer pension plans to the employees who are in the scope of Law on different dates, depending on their number of employees.

Number of employees at the gradual entrance date will be taken as a base; any decrease in the number of employees after this date will have no effect.

Workplace Number of Staff                            Gradual Entrance Date

 1000 and over                                                     1st January 2017

   250 (Inc.) to 999                                               1st April 2017

   100 to 249                                                          1st July 2017

     50 to 99                                                            1^st January 2018

     10 to 49                                                            1st July 2018

       5 to 9                                                             1st January 2019

Premium contribution base and deductions

• Participants’ minimum contribution amount will be 3% of their earning subject to premium. It will be possible to contribute more than this amount.
• Digits after the comma will not be taken into calculation.
• Deduction will be made from the net salary of employees.

Pension Companies

You can find the names of insurance companies in Pension Monitoring Center’s website: www.egm.org.tr

For detailed information please visit our website.