Supplementary Pension for Retirees! According to the latest information, the Supplementary Pension System is planned to be implemented within two years. Under the proposed Supplementary Pension System, a dual-pension model will be introduced. Small contribution deductions will be taken from employees’ wages, while the state will provide significant support to the Supplementary Pension. Employers will also contribute to the system at reasonable rates.
Once the Supplementary Pension System comes into force, employees who change jobs or start a new job will not lose their accrued rights. Payments accumulated within the system will continue to grow until retirement age, except in specific exceptional cases. If special circumstances arise, a partial withdrawal from the fund will be permitted under defined conditions. Citizens who buy a home or marry will be able to benefit from this fund. Those who qualify for retirement will receive a pension from the current social insurance system as well as from the Supplementary Pension System; alternatively, individuals may choose to withdraw their accumulated savings as a lump sum.
How Will the Supplementary Pension System Work?
The Supplementary Pension System will operate in alignment with the age limits used in the social security system. Once the specified age requirement is met, participants will be able to exit the system subject to a pre-determined discount or formula. Unlike private individual pension plans, the Supplementary Pension System will be established through funds organized within companies or institutions for their employees. The TES aims to build an annual fund volume of 100 billion TRY. Implementing workplace-based and sectoral supplementary pensions is expected to both increase retirees’ incomes and deepen the capital markets.
The new TES model rests on four main pillars: fund management and operation, inclusion of employers in pension financing supported by the state, supplementary pension provision, and protection of workers’ rights. Participation in pension schemes outside the public retirement system will be encouraged. The plan is to enhance the individual pension framework to increase the number of participants, the duration of membership, and total fund balances. Following the announcement by President Recep Tayyip Erdoğan, the Supplementary Pension System will open the way for dual pension incomes.
Within Turkey, many workers receive lower pension payments than their final salaries while working. The new system aims to prevent that drop by providing a secondary pension income. The automatic Individual Pension System that began in 2017 is planned to be transitioned into the TES in the next phase. The initial design foresees mandatory participation, enabling workers to save without disrupting household budgets. Both the state and employers will contribute to the accumulated savings. The TES differs from other pension models by focusing on occupations with higher risk, wear-and-tear, or physically demanding duties, providing targeted retirement provisions for those groups.