H E A L T H W E A L T H C A R E E R
June.2018
A U T O E N R O L M E N T P E N S I O N
S Y S T E M I N T U R K E Y
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C O N T E N T S
Auto Enrolment System
Employee Rights and Responsibilities
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(C) MERCER 2018 2
AUTO ENROLMENT
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1,000+
Employees
January 2017
250-999
Employees
April 2017
100-249
Employees
50-99
Employees
10-49
Employees
July 2017
5-9
Employees
January 2018 July 2018 January 2019
I M P L E M E N T A T I O N T I M E L I N E
As a function of employee headcount;
Headcounts will be based on the tax registration number of the entities
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S C O P E
As of the date of coverage of the employer, all employees covered
by 4a and 4c who are provided with the following conditions shall
be included in the system
.
Turkish citizen or blue card holders
Employees under the age of 45 (born on and after 01.07.1973)
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E M P L O Y E E C O N T R I B U T I O N
3% of monthly earnings which is subject to Social Security premium
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W H A T I S S O C I A L S E C U R I T Y P R E M I U M ?
Included to Social Security premium Non included to Social Security premium
Overtime
Bonus
Life and Health Insurance
Severance Pay
Non-cash Grants
₺ Commission
Premium
Termination Pay
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W H A T A R E T H E M I N I M U M O R M A X I M U M P A Y M E N T
L I M I T S ?
The contribution should be 3% of the monthly minimum gross wage
and also should be between 3% of the monthly minimum gross
wage and 3% of SGK cap.
Minimum = 2.029,50 TL %3 60 TL
Maximum = 15.221,40 TL %3 456 TL
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C U R R E N T P E N S I O N A C C O U N T
Auto enrolment account will be opened for employees who are
eligible for auto-enrolment regardless of they have current pension
accounts.
In this context, an auto-enrolment account will also be opened for
those who already have a pension contract, and the acquired rights
will be tracked separately.
Current Pension
Account Auto Enrolment
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S T A T E C O N T R I B U T I O N
- 25% State subsidy of contribution will be paid for employee up to
monthly min gross wage (TRY 1,777.50)
The state contribution cap for contracts under auto-enrolment will be
calculated separately from the state contribution limit of existing pension
contracts.
- Additional one time state contribution of TRY 1,000 will be valid for
employees who does not opt out within two months.
- Additional 5% of total assets will be paid for employees who are
eligible for retirement (56 years of age and being in the system for
at least 10 years) and prefers to have an annuity product of at
least 10 years)
5% +
1,000 TRY + x2
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S T A T E C O N T R I B U T I O N
State contributions are calculated as
commitments and these committed amounts
are recorded in the employee's account in a
way that can be followed on the company's
website.
The 25% state contribution amounts are
evaluated taking into account the changes in
the TUFE at the beginning of the calendar
year following the month in which the state
contribution payment is calculated.
Cash Deposit
Current Pension
Account Auto Enrolment
State contributions are paid cash by
government to current pension contact at the
next month of contribution paid.
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S T A T E C O N T R I B U T I O N P R O G R E S S P A Y M E N T
The initial contribution of 1,000 TRY and the state contributes 25%
will be same progress payment periods.
Year Vesting
3 %15
6 %35
10 %60
10 Year + 56 Age %100
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(C) MERCER 2018 12
EMPLOYEE RIGHTS AND
RESPONSIBIL IT IES
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O P T O U T R I G H T
Regardless of the day on which the employer signs the pension
contract, the employee is notified of the work day following the date
on which the employee's first contribution is transferred to the
pension company.
Employee may use the right to opt-out within 60 days following the
payment of the first contribution.
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W I T H D R A W A L
After a period of 60 days, withdrawals may be made at any time, with
legal interruptions.
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D I F F E R E N C E B E T W E E N O P T - O U T A N D W I T H D R A W A L
Period in
PensionSystem
Tax Deduction
(from Earnings)
Before 10 years %15
After 10 years %10
Retirement:
(10 years in Pension system +
56 age)
%5
In case of opt-out, the contributions
paid will be returned to the
employee together with the
investment incomes, if any and
also it is guarenteed by pension
company that they will not be any
loss from contriubiton amount.
Legal time for completing opt-out
process is 10 working days.
Legal time for completing
withdrawal process is 20 working
days.
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A F T E R O P T - O U T / W I T H D R A W A L
It is not possible to include employee it in the system again by his/her demand.
However, if the employees continue to work in the same workplace should be
included in the system once every two years in accordance with the procedures
determined by the Undersecretariat.
Employees who use the right to opt-out can get the benefits of 25% of the state
subsidy, but can not get benefit of the initial state contribution of 1,000 TRY.
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S U S P E N S I O N
17
Payments may be suspended due to employee's demand, however
at the end of 3 months the contribution will be start to collected
again.
Employee should repeat suspension demand within every three
months.
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I N C R E A S E O F C O N T R I B U T I O N A M O U N T
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The employer may increase or deduct the employee deduction rate
by informing employer, but not less than the deduction rate set out
in the Law.
A fixed amount can not be determined for the payments, the
contributions are proportionally calculated.
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F U N D S E L E C T I O N
19
At the time of entry into the system, preference is given to
employees who have interest / no interest fund selection.
However, if an employee does not specify a fund selection, the
employer makes this preference on behalf of the employee
concerned.
Interest Fund Non-Interest Fund
Beginning Funds
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F U N D S E L E C T I O N
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The employee can change the fund distribution after the end of the
opt-out period.
Prior to this change, a risk profile questionnaire is presented to
employee.
Employee has right to change fund seleciton 6 times in a year.
Please find below fund options: Conservative
Balanced
Dynamic
Aggressive
Interest Fund Non-Interest Fund
Other Funds
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W O R K P L A C E C H A N G E S
If there is a retirement plan under auto-enrolment in the new workplace, the
employee switches savings with new workplace contract types.
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U N E M P L O Y M E N T C O N D I T I O N
If the employee changes his / her workplace and there is no retirement plan
offered at the new workplace, or if the employee's employment relationship ends,
it is possible to continue to stay in the system by paying the contribution rate at
least 3% of minimum monthly gross wage which is applied in the first six months
of the calendar year.
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F O R A L L D E M A N D R E G A R D L E S S T O A U T O -
E N R O L M E N T C O N T R A C T S ;
AvivaSA Emeklilik ve Hayat A.Ş. Call Center 444 11 11
Web Site www.avivasa.com.tr
Employee
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