Retirement is the process by which individuals work and contribute premiums or deductions until a certain age, then end their working life and receive a pension. Those who regularly pay their premiums and meet the required conditions become eligible for retirement. Recently, private pension plans have become an important part of the retirement conversation. In this article we examine individual pension online services and how they work.
Individual Pension System
The individual pension system allows workers to build additional savings so they can continue receiving income after they leave the workforce. Participants contribute regularly to create a supplementary income stream for retirement. The system is supervised by the Pension Monitoring Center, the Undersecretariat of Treasury and the Capital Markets Board, while private pension companies manage the plans and handle operations.
Although participation in individual pension plans was initially voluntary, an automatic enrollment policy has been introduced in recent years.
Automatic enrollment to the individual pension system went into effect recently. According to the regulations, those eligible for automatic enrollment are:
- Turkish citizens,
- Individuals under the age of 45,
- Workers covered under article 4 of Law No. 5510 on Social Insurance and General Health Insurance.
The workplaces that will be covered by the individual pension system are determined by the Council of Ministers.
Online services for individual pensions are increasingly important. The government provides an official website to perform individual pension transactions. Using that portal you can access information about the system and complete related online procedures.
When you open the official site you will see a page similar to the image above. The online portal provides explanations about the individual pension system and a frequently asked questions section that answers common concerns.
Through individual pension online services you can join the automatic enrollment system and manage your pension account. The automatic enrollment policy, applied since January 1, 2017, enrolls employees in employer-based private pension plans by default. Workers included through automatic enrollment can also opt out if they choose.
Another important question addressed by the online system is who qualifies for pension benefits. Under current rules, participants who have been in the system for at least 10 years and have reached the age of 56 become eligible for a pension. Participants who qualify for retirement and leave the system may be entitled to incentives such as a 25% state contribution on their accumulated savings and an initial government contribution given at enrollment.
When a participant becomes entitled to a pension, they may receive their accumulated savings using one of several methods:
- Lump-Sum Payment: Receiving the savings as a single payment.
- Programmed Withdrawals: Receiving a regular pension amount based on a schedule set by the participant.
- Lifetime Annuity: Converting the savings into an annuity that pays out for the remainder of the participant’s life.
When an employer enrolls employees via automatic enrollment, the employer has responsibilities under the individual pension rules. The employer must contract with a private pension company to provide the plan and should collect the employee’s fund preferences before selecting default investment options. The employer is also responsible for withholding the contribution amount from the employee’s salary and forwarding it to the pension company.
The following is a list of pension companies that employers may contract with when organizing individual pension plans:
- Aegon Emeklilik ve Hayat A.Ş.
- NN Hayat ve Emeklilik A.Ş.
- Allianz Hayat ve Emeklilik A.Ş.
- Groupama Emeklilik A.Ş.
- Allianz Yaşam ve Emeklilik A.Ş.
- Avivasa Emeklilik ve Hayat A.Ş.
- Anadolu Hayat ve Emeklilik A.Ş.
- Asya Emeklilik ve Hayat A.Ş.
- Axa Hayat ve Emeklilik A.Ş.
- Ziraat Hayat ve Emeklilik A.Ş.
- MetLife Emeklilik ve Hayat A.Ş.
- BNP Paribas Cardif Emeklilik A.Ş.
- Cigna Finans Emeklilik ve Hayat A.Ş.
- Garanti Emeklilik ve Hayat A.Ş.
- Halk Hayat ve Emeklilik A.Ş.
- Fiba Emeklilik ve Hayat A.Ş.
- Katılım Emeklilik ve Hayat A.Ş.
- Vakıf Emeklilik A.Ş.
These companies are among those available for employers organizing individual pension plans. For detailed information and to access online transactions, use the official individual pension portal provided by the government.