The automatic enrollment personal pension system, commonly called BES, has been used in many countries and was implemented in Turkey as of 2017. Because it is relatively new here, there is still confusion about how it works. In this article we provide clear, detailed information about the automatic enrollment BES and answer the question most workers ask first: how much will be deducted from my salary for BES?
What Is Automatic Enrollment BES?
Personal pension systems enable workers to pay contributions and build savings through a pension company. Automatic enrollment means the state requires employers to register eligible employees in a pension plan without the employee having to apply. As the name implies, employees are automatically enrolled regardless of their express consent. That does not mean people must remain in the plan forever: under the system that took effect on January 1, 2017, employees can withdraw within two months without any financial loss. If they opt out after two months, pension companies may apply a withdrawal fee. To encourage participation, the state provides contribution bonuses for those who remain in the system for 1, 3, 6, 10 years; employees who exercise their right to withdraw do not receive those bonuses.
Whose Salary Will Be Subject to Automatic BES Deductions?
Automatic enrollment applies to insured workers born in 1972 or later, i.e., employees aged 45 and under. Initial estimates projected that over 14 million insured people would join the automatic BES by the end of 2017 and begin making contributions. Because the system was new, introduction was phased in by workplace size and sector rather than starting for all employers on the same date. The schedule was as follows:
- Private sector workplaces with 1,000 or more employees: January 1, 2017
- General and special-budget administrations (civil servants): April 1, 2017
- Private sector with 250–999 employees: April 1, 2017
- Private sector with 100–249 employees: July 1, 2017
- Local administrations and state economic enterprises (KİT): January 1, 2018
- Private sector with 10–49 employees: July 1, 2018
- Private sector with 5–9 employees: January 1, 2019
How Much Will Be Deducted from My Salary for BES?
Although the idea of a more comfortable retirement and state contribution bonuses make the system attractive, many workers worry about immediate cash flow: they don’t want a large share of their salary diverted into long-term savings. That leads to the question: how much will be deducted from my salary for BES?
The BES contribution rate for automatic enrollment is set as a percentage of earnings rather than a fixed amount. Specifically, the deduction equals 3% of the employee’s gross wage used for social security contribution calculations (the “prime-based earnings”). Prime-based earnings include the employee’s monthly wage, all types of premiums, bonuses, and other items that administrative courts recognize as earnings. You can check your prime-based earnings through the e-Government portal using your password obtained from PTT: sign in to “E-services” → “Social Security Institution” → “Common 4A/4B/4C Services” and click “SGK Registration and Service Statement.” The BES deduction will be 3% of the prime-based earnings shown there.
Based on the rules, the BES deduction resulting from this calculation has minimum and maximum bounds: the monthly deduction will be at least 53 TRY and at most 340 TRY.
To illustrate, here is a simple example. Consider a civil servant covered by Law No. 5510 with a university degree. If the components of that person’s earnings sum to a prime-based earning of 2,002.17 TRY, then 3% of that amount — 60.07 TRY — will be deducted from the salary for the individual pension plan.
