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The number of employees are determined as of the date of Moreover, an additional one-off state contribution of a
being included into the scope, based on the data from Social thousand liras at entry, is provided to the employees
Security Institute. The number of total employees working at preferring to remain in the system. However, an immediate
all work places is taken into account for employers with more realization of that contribution is not possible. Conditions
than one premises. On the other side, once being included implemented for receiving the state contribution in general
into the scope, decreases in the employer’s number of are valid for this, too.
employees following the date of integration into the system
is not taken into account. State contribution amounts according to the period of
staying within the system are provided in the table below:
Deduction rate of 3 %
Employees’ share of contribution is calculated as 3 % of the Portion of state
earning taken as basis to premium that is set pursuant to the Period of staying within the contribution (including
Social Security Law. For 2017, the threshold of earning taken system yields) to be paid to the
participator
as basis to premium is applied at TL 1,777.50 (minimum
wage) while the upper limit is applied at TL 13,331.40 level. Less than 3 years % 0
Remainders in kurus (the Turkish currency’s monetary unit At least 3 years % 15
with value under 1 TL) are not taken into account during the
calculation of participation share amounts. Employees may At least 6 years % 35
demand for higher cuts than the amount calculated above.
At least 10 years % 60
Employer’s responsibility Gaining retirement right on PPS % 100
First of all, the employer is obliged to include the employees
within the scope of the pension plan regarding the contract Employees remaining within the system for at least 10 years
that will be concluded with the pension company. Also, as of the date of participation in PPS, will be gaining the right
the employer has to transfer the participation amount, for retirement provided that they have turned 56. The ones
calculated and cut from salaries, to the pensions company withdrawing from the system due to death or disablement
within the workday following the date that the salaries are are also able to receive the whole state contribution and its
paid. yields.
If not transferred Another advantage is provided to the employees preferring
to receive the savings under an annual income insurance
In the circumstance that any financial loss occurs on contract of at least ten years following the retirement right is
the savings of employee resulting from the contribution obtained. An additional state contribution corresponding to 5
amount’s not being transferred or transferred late, the % of savings amount will be given to those.
employer is liable to compensate for it.
Fund management fee only
In addition, it shouldn’t be ignored that the employer will
be subject to an administrative fine of a hundred liras for Any cuts other than a fund management fee cannot be
each violation in case the liabilities within the scope of the applied to the ones included in the private pension plan
implementation are not met. within the scope of auto-enrollment.
Withdrawal is possible
This article has been published in the Ekonomist magazine’s
The employee retains the right of withdrawing (retraction) issue 2017/26 dated 25.06.2017.
from the contract. However, this right should be exercised
within two months following the date that they received the
notification for being included in the pension plan.
In the circumstance of withdrawal, contribution shares
paid and investment yields, if exist, in his/her account, are
returned to the employee within ten workdays. The pensions
company is liable for fund management to ensure preventing
any losses on contribution shares paid during the withdrawal
period.
Additional contribution of a thousand liras
There is a state contribution equivalent to the 25 % of shares
paid by the participators to the private pensions system.
This implementation is also valid for contribution shares cut
from the employees by the employers and transferred to PPS
within the scope of auto-enrollment.
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