Essential information about mandatory private pension begins with the fact that it is a compulsory system. Introduced on January 1, 2017, this mandatory private pension applies to every Turkish citizen under the age of 45. The system—established by law—automatically enrolls eligible employees in a private pension plan. A primary benefit of joining is a one-time government contribution of 1000 TL. Additionally, participants who remain in the system for at least 10 years receive a state top-up equivalent to 5% of their total accumulated savings.
Mandatory Private Pension (BES) — Overview
The mandatory BES system came into force in 2017. It applies to all Turkish citizens under 45 who work in the public or private sector. Contributions are deducted directly from employees’ salaries and transferred into individual pension accounts. Although enrollment is automatic, participants can opt out within a specified period. Previously, people who left the system could not rejoin, but regulations have since been updated to allow re-entry under certain conditions. The immediate incentive for joining is the state’s one-time 1000 TL contribution.
Who Is Covered by Mandatory BES?
Mandatory BES covers employees who are younger than 45. In short, anyone born after 1972 who holds Turkish citizenship and is employed falls within the scope of the mandatory private pension. Both private-sector and public-sector workers are included. Enrollment is automatic and does not require a separate application at an institution. Although participation is mandatory by default, individuals may choose to leave the scheme if they wish.
Is Participation Compulsory?
Enrollment in the mandatory private pension is automatic for insured employees. New enrollees have a two-month period during which they can withdraw from the system. If a participant leaves within three years and later re-enters, they will no longer be eligible for the one-time 1000 TL contribution. Contribution rates are calculated as 3% of an employee’s earnings subject to social security premiums. Deductions are made monthly from salaries, up to the social security ceiling. The minimum monthly deduction is 53 TL and the maximum is 340 TL. For example, if the monthly earnings subject to premiums are 2,000 TL, the BES deduction is 60 TL; if earnings are 3,500 TL, the deduction is 105 TL.
How Much Is Deducted?
The contribution rate for mandatory private pension is a flat 3% of the employee’s salary subject to premiums. For instance, a salary of 2,500 TL results in a 75 TL monthly deduction; a 3,000 TL salary results in a 90 TL deduction. Participants facing financial difficulty may request a temporary suspension of contributions for up to three months. If more time is needed, they can notify their provider before the three months end to request an extension. For incentive purposes, both mandatory and voluntary pension schemes offer state contributions—subject to vesting—based on the time the participant remains in the system. If a participant leaves within 3 to 6 years, they may receive 15% of accumulated funds; leaving between 6 and 10 years typically allows receipt of 35%; and completing 10 years makes 60% of the accumulated amount available.
Legislation Governing Mandatory BES
Mandatory private pension applies to Turkish citizens who have not yet turned 45 and is regulated under Law No. 6740. The following groups are not covered by mandatory BES:
- Non-Turkish citizens,
- Individuals aged 45 or older,
- Self-employed persons insured under Bağ-Kur.
Under the regulation, the employee’s contribution deducted by the employer is calculated as 3% of the salary subject to premiums. Participation starts automatically, and any employee can leave the system during the allowed period. Employer coverage rollout was staged by company size as follows:
- From January 2017: companies with 1,000 or more employees,
- From April 2017: companies with 250–999 employees,
- From July 2017: companies with 100–249 employees,
- From January 2018: companies with 50–99 employees,
- From July 2018: companies with 10–49 employees,
- From January 2019: companies with 5–9 employees.
Canceling Mandatory BES
To cancel mandatory private pension, the participant must apply within two months. After enrollment, the pension provider sends notification of the new membership and related salary deductions by mail, SMS, or e-mail. From the date of that notification, the individual can exercise the right of withdrawal and leave the automatic pension scheme. The withdrawal request can be submitted online via the pension company’s cancellation form or by submitting a written petition. Once the company receives the withdrawal request, all deducted amounts are returned to the employee within 10 days.
Vesting and State Contribution
State contributions and vesting are based on the length of time a participant remains in the scheme. The typical vesting schedule applied to accumulated funds is:
- After at least 3 years: 15% of the total accumulated amount,
- After 6 years: 35% of the total,
- After 10 years: 60% of the total.
Exercising Withdrawal Rights
Participants may exercise their right to withdraw within the two-month notification period to cancel automatic enrollment. The usual steps are:
- Submit the cancellation request via phone, fax, or e-mail to the pension provider,
- The provider processes the request within five business days,
- The employee completes and signs the withdrawal form and sends it to the company,
- Deductions already made from the salary are refunded promptly.
After exiting the private pension system, a person may be automatically re-enrolled two years later. Employees who are re-enrolled can again choose to leave the system if they wish.