Turkey approves new auto-enrolment law for private pensions

Added 15th August 2016

Turkey’s parliament has approved a new law that will require workers under 45 to be automatically enrolled in a private pension plan, in a bid to boost the country’s retirement savings.

Turkey approves new auto-enrolment law for private pensions

According to Reuters, finance minister Naci Agbal said that the law will allow the private pension industry, worth TRY56bn (£14.6bn, €16.8bn, $18.8bn) from over 6.4 million customers, to expand as well as helping workers to increase their welfare during retirement.

The law, expected to come into force on 1 January 2017, means employees will have to contribute around 3% of their annual income – although this is subject to change by the Council of Ministers.

Employees will be given a list, approved by the undersecretariat of Treasury, of private pension companies to choose from.

In addition, the government will carry on with its 25% contribution to employees pension pots, as well as making a one-off TRY1,000 loyalty payment for employees who carry on with their pension plans for more than two months.

Employees looking to opt-out of the system will be able to exit it during this two-month probationary period, and have their savings returned.

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Monira Matin

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Monira joined International Adviser in March 2016 from Informa Global Markets where she worked as a eurobond reporter for over two years, covering fixed income markets. She has previously held a number of editorial positions covering politics, insurance and technology. Monira has a degree in Journalism and Economics from City University.

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