Introduction

A long-awaited legal arrangement on employees’ automatic enrollment in private pension plans by their employers was introduced into Turkish law by way of an amendment law published on August 25 2016. The amendment law adds new provisions to the Private Pension Savings and Investment System Act 2001.

Accordingly, employees (including public officials) under the age of 45 will be enrolled in a private pension plan with a pension agreement between the employer and a pension company, which is executed under the terms of the act.

Private Pension Savings and Investment System Act

The Private Pension Savings and Investment System Act sets out the employee’s contribution to the plan as 3% of his or her average earnings, taken as basic to social security premiums, and obliges the employer to place this amount in the plan on the day following payment of the employee’s salary (at the latest). The employee may request a higher percentage contribution to the plan from his or her employer. The employer is liable for any monetary loss in the employee’s savings arising from any missing, late or non-payment.

Since 2013, as per Additional Article 1 of the Private Pension Savings and Investment System Act, the state’s contribution to private pension plans has been 25% of individuals’ contributions. The new Additional Article 2 provides that automatically enrolled employees will also receive the state’s contribution.

Full Content: International Law Office

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