Age Limit Removed in EYT Eyes on Retirement Details

Those employees who cannot attain retirement due to age, namely EYT, have been one of the most talked-about-topics in Turkey in recent years. President Erdogan has given good news on the matter as a result of work carried out in the last few months – the details of the legal framework are yet to be disclosed.

President announced that the insured people will be able to retire without attaining the retirement age, provided that the number of pension premiums and other terms of their insurance are met.

There is no age requirement but start date of insurance requirement in EYT

The change in the legal framework in 1999 for citizens whose social insurance started before 08.09.1999 created the term EYT and the focus on age requirement. As before the amendment made with the Law No. 4447 on September 9, 1999, all insured people could retire when they met the below-mentioned conditions, regardless of age.

■ 4/a (SSK) insured 5,000 premium days and 20 years for women and 25 years for men,

■ 20 full years (7,200 days) if the 4/b (Bağ-Kur) insured are female, 25 full years (9,000 days) premium days if they are men,

■ 20 full years of service for women and 25 full years for men, who are participants within the scope of 4/c (Retirement Fund).

The above conditions will be restored after a 23-year hiatus, and citizens who meet these conditions as of the base date will be able to retire.

Income Replacement Rate (ABO) is low 

With the abolition of the age requirement, the Income Replacement Rate (ABO) is taken into consideration as very low, particularly on 01.10.2008 and afterwards. We are waiting for details on the ABO rate as well as the scope of the legal change.

Premium Incentive for Retired Employees

There is a difference in employer costs between regular employees and retired employees, that is, employees subject to social support premium (SGDP).

For employees subject to all insurance branches

Employer premium share is 22.5% and employee share is 15% in total 37.5%.

In terms of retired insurance holders, there are a total of 32% premium deductions, with the employer’s premium share being 22.5% (+2) and the worker’s premium share being 7.5%.

In the employer’s cost over the gross wage, although the employer’s contribution share is 22.5% for employees subject to all insurance branches, the employer’s premium share is calculated as 24.5% for retirees.

It was announced by the President that an incentive on EYT pension such as a 5-point treasury discount on employers’ premium shares would be provided.

In addition, a KGF-supported loan package is prepared for employers for severance pay payments.

EYT, which is estimated to retire approximately 2 million 250 thousand citizens, is expected to be regulated after the removal of the age requirement.

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