Latest Amendments on Private Pension System

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Private Pension System has been introduced by Law No. 6740 and entered into force as of 1st January 2017. Till then workplaces started to enter into contracts with pension companies and offer pension plans to the employees, who are in the scope of the Law, on different dates, depending on their number of employees.

Gradual entering had been finalized as follows.

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                                                          1st January 2018

     10 to 49                                                           1st July 2018

       5 to 9                                                             1st January 2019

Now with the new Amendment Regulation issued in the Official Gazette dated 27 December 2018, following provisions has come into force.

SCOPE OF THE LAW WIDENED

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.

  • New regulation stipulate that young employees under 18 years of age and child employees will be included in the private pension system.
  • New registered companies with at least 5 employees shall start deducting Private Pension contribution from the employees as of the first payment in the following year.
  • Companies, who were out of scope due to their number of employees were under 5, will start deducting Private Pension contribution from the employees as of the first payment in the following year in case their number of employees increased over 5.

RIGHT OF WITHDRAWAL

As is known, participant employees may have the right of withdrawal from the system within two months.

Employees, who withdraw from the system will be re-enrolled in three years. Re-enrolment will be for once only, and the procedure will be announced by the Ministry.

WORKPLACES WHO DELAYED TO ENTER PRIVATE PENSION

As it is stated above, gradual entering for companies with 5 and more employees has been finalized as of 1 January 2019.

Workplaces who missed entering private pension may join until 27 February 2019 without paying any fine.

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