From 1 January 2017, employers must enrol all employees into an Individual Pension System if they are under 45 year’s old and Turkish citizens. Employees can terminate their enrolment in the pension scheme within two months of being notified of their enrolment (more). Further details of the transition schedule and how the scheme will work have now been announced via secondary legislation.
The Regulation Regarding Procedures and Principles of Auto-Enrolment of the Employees to the Employee Pension Scheme by Their Employers (“Regulation”) was published in Official Gazette number 29936 on 2 January 2017, effective from 1 January 2017.
The Regulation outlines details of:
- A gradual transition schedule
- Which workplaces and employees are included in the scheme
- The contribution amount to be deducted from employee salaries.
- The procedures and principles regarding how the scheme will work.
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When determining the number of employees, all employees of the same employer should be counted and added together, including employees working at different locations.
The employee contribution amount is 3% of the base salary to premiums or base salary to pension contributions, respectively. The contribution amount will be deducted from the employee’s salary and transferred to the related pension company.
Salary paid to the employee for works done before the employee was included in the scheme cannot be subject to any contribution deductions.
Please see this link for full text of the Regulation (only available in Turkish).
