Individual (Personal) Pension

Persons with the capacity to exercise civil rights and anyone over the age of 18 can participate, while those under the age of 18 can participate as a participant with the signature of a legal representative.

As a complement to the Social Security System, it aims to increase the welfare level of individuals by providing them with an additional income during retirement by directing their retirement savings towards investment, to increase employment by creating long-term resources for the economy and to contribute to economic development.

The individual is entitled to retirement after completing the age of 56, provided that they remain in the system for at least 10 years from the date of entry into the Private Pension System.

The amount may vary according to the plan chosen by the participant, there is no upper limit on payments.

During the term of the pension contract, contributions may be suspended. If no payment is made to the relevant account within three months following the due date of the unpaid contribution, it is considered that the payment has been suspended in the relevant contract.

Multiple pension contracts can be held in the same company or in different companies.

State contribution eligibility rates vary according to the time spent in the Private Pension System.

Yes, in case of a contribution payment exceeding the upper limit of the State Contribution during the year, the State contribution for the excess amount is reflected in the contract in the following year(s).

The participant can leave the Private Pension System at any time. However, in this case, they will not be able to benefit from the advantages of retirement. Payments made to those who have paid contributions for less than 10 years and left without earning the right to retire are subject to withholding tax at the rate of 15%, and payments made to those who have paid contributions for 10 years and left without earning the right to retire and the amount of income included in the vested state contribution are subject to withholding tax at the rate of 10%. Payments made to those who are entitled to pension and those who leave the system due to compulsory reasons such as death, disability or liquidation, and the amount of income included in the state contribution are subject to withholding tax at the rate of 5%.

Earnings of pension investment funds are exempt from income tax and corporate tax. There is a 15% withholding tax on deposit funds but no withholding tax on pension mutual funds.

You can grow your savings interest-free. With our interest-free private pension plans, we invest in funds that are allowed to be traded according to Islamic finance principles and that comply with interest-free and participation banking principles.

On the pension company's website, participants can access their accounts by logging in using the internet passwords provided to them, and can access their savings status, fund returns, payment periods and perform transactions related to the private pension contract.

The transfer of receivables practice allows participants in need of cash to pledge all or part of their receivables arising from private pension contracts, excluding state contributions, as collateral at banks without the need to leave the PPS.

By pledging your savings in the PPS as collateral, you can obtain loans from banks with favorable financing options. The transfer of receivables in the private pension system is valid for banks that have started to implement the transfer of receivables, and the appropriate financing options to be applied by banks may vary.

1.What are the Transferable Contracts?

2. Which Contracts Are Not Transferable?

3. How is the Transfer Process Progressing?

4. How Does the Transfer of Receivables End?

5. Which Rights Can I Exercise During the Transfer of Receivables Contract?

State Contribution is the amount paid by the state to the participant's pension account in a certain proportion to the contributions paid by the participant. With the "Law No. 7351 on Amendments to Individual Pension Savings and Investments Systems Law and Certain Laws and Decree Law numbered 375" published in the Official Gazette No. 31727 dated January 22, 2022, this rate, which was 25%, is now applied as 30%. State contributions to lump-sum contribution payments are allowed to be made on a yearly basis. In this way, it is possible to make a lump sum contribution and receive the state contribution over each year's limit. By investing savings early in pension funds, both fund returns and state contributions will be realized.

Yes, in order to benefit from the state contribution, the state contribution is deposited regardless of the person who pays the contribution on behalf and account of the participant.

Every Turkish citizen and blue card holders who have a private pension contract can benefit from the state contribution, no action is taken in this regard, regular payments are automatically credited to the contract by the state. (Except for participants included in the employer group pension plan)

The upper limit for the state contribution is applied on a participant basis. The state contribution amount calculated for the total contribution amount paid by the participant who pays contributions to more than one contract in the same period is distributed to the contract according to the weight of the contribution amount paid per contract in the relevant month. The amount of contributions paid within a calendar year and to be taken into account in the calculation of state contribution is equal to the annual gross minimum wage.                          

State contribution cannot be attached or pledged.

In case of termination of an private pension contract between 29/06/2012 - 29/06/2014, state contribution is not paid from other existing pension contracts and new private pension contracts until 31/12/2014.

There are no health, accident and death coverages in the Private Pension System.

Active members who have completed 56 years of age and have at least 10 years of vested service and inactive members, as well as active members who have earned the right to retire according to the service provider regulations, can transfer to the pension income plan.

The member or employee is required to transfer at least 4 times the monthly gross minimum wage to the contract during the establishment of each contract. The amount of the minimum wage to be taken as basis here is the gross monthly minimum wage in effect on the date of the relevant transfer.

Yes, the member or employee can transfer to multiple companies or multiple contracts within the same company.

In the event that the participant in question terminates any of these contracts, the periods vested at the time of transfer will remain valid for the participant's ongoing contracts.

The legislation to which the service provider is subject is taken as basis in the calculation of the time actually spent by the transferring member or employee in the relevant service provider. Accordingly, periods such as military service, unpaid leave, suspension of membership, etc., which are not included in the membership period, if any, are not taken into account in the duration calculation.

In the event that the participant dies while the transfer is made in parts, the savings transferred to the private pension system shall be paid to the beneficiaries, and the savings of the deceased participant, if any, remaining in the relevant service provider shall not be subject to transfer on their behalf. On the other hand, if there are inactive members who are newly added to the service provider as beneficiaries under the relevant service provider's legislation as a result of the participant's death, these individuals may make a separate transfer on their behalf for their remaining savings.

The upper limit for the payments that can be made to the participant from the pension income plan during the first 3 years from the date of the first transfer is calculated according to the principles below and can be revised on the next contract anniversary or on the participant's birth date, with updated information (current savings and participant age).

a) Participants over the age of 56 cannot be paid more than the maximum monthly amount calculated according to the PMF table below. The upper limit for the amount that can be paid per contract under programmed reimbursement is determined according to the life expectancy in the table. For example, for a participant who is 56 years old on the date of the first transfer, the maximum amount that they can receive monthly for the first year will be "Total savings in the contract/214".

b) When making payments to participants younger than 56 years of age, the maximum amount that they can receive per month is calculated by dividing their total savings by the following monthly period and no payment can be made more than the calculated maximum monthly amount

    i. If the last age at which the member can receive payment from the service provider is available, the full number of months between the age at the time of transfer and the last age is taken as the basis. For example, the maximum amount that a participant who is 8 years old on the date of the first transfer and who is entitled to receive an orphan pension until the age of 18 according to the relevant service provider legislation, can receive monthly during the waiting period will be "Total savings in the contract/120". In any case, the full number of months cannot be less than 36, as the participant cannot receive the full amount of their savings before 3 years.

   ii. If the last age at which the member can receive a pension from the service provider is not available or not available, 214 months is taken as the basis.

During the waiting period, the participant who obtains the right to retire according to the private pension legislation can switch to a pension income plan by meeting an amount limit of at least 4 times the monthly gross minimum wage. The amount of the minimum wage to be taken as basis here is the gross monthly minimum wage valid on the date of transition to the pension income plan.

Pursuant to the Additional Article 1 of the Law, the period that the participant has actually stayed in the private pension system since 01.01.2013 is subject to state contribution. In this context, the period of entitlement to state contribution starts with the date of the first transfer to the private pension system.

Within 3 years from the date of the first transfer, the amounts in the savings and state contribution account under a pension contract established by transfer cannot be transferred to another pension company.

Contributions paid on behalf of members or employees by the service provider can be transferred under the employer group pension contract. The vesting period for these contracts starts with the date of transfer and cannot be determined to be shorter than the waiting period. The implementation in this regard is carried out within the framework of the provisions of the Regulation on the Private Pension System and the Table of Minimum Vesting Rates by Years.

Such payments are based on the gross monthly minimum wage in effect on the date the relevant (initial or additional) transfer amount is actually paid to the company. These payments are added to the total amount transferred to the private pension system. No state contribution is paid for contributions made within this scope. 

With the amendment made in the second paragraph of Article 17 of Law No. 4632, the possibility to transfer the receivables of private pension contracts has been introduced and it is possible to transfer the PPS contract to the receivables during the loan utilization. In this way, it was aimed to reduce the exit of participants from the system by taking their private pension savings due to financial needs, and it was thought that it would be beneficial to provide access to loans at favorable conditions by transferring the PPS savings to the receivable.

Article 2 of Law No. 4632 was amended to allow employees over the age of forty-five to be included in the automatic participation system upon their request. Thus, it will be possible for an employee who reaches the age of 45 to save by taking advantage of the state contribution limit in the automatic participation system.

In order to be eligible for retirement from the Private Pension System, one must have completed the age of 56, provided that they have been in the system for at least 10 years from the date of entry into the PPS.

Retirement bonuses can be invested as a lump sum and regular pensions as monthly contributions to the PPS contract. In this way, you benefit from the 30% state contribution and at the same time your savings continue to grow in value in pension funds.

In the private pension system, up to 50% of the savings in the contract can be partially paid to the participant without exiting the system in cases of marriage, housing purchase, education and natural disasters. For the education status, a contract for those under 18 years old can be subject to partial payment on 01.06.2026. Therefore, partial payment in case of education is not currently practiced).

Up to 50% of savings can be taken.

In order to benefit from the right to partial payment in case of marriage or purchase of a house;

In the event of a natural disaster, the right to partial payment can be exercised;

For partial payments made in case of marriage or house purchase, state contribution is paid at the rate of 20% of the partial payment amount upon submission of the required documents. In case of partial payments in case of natural disasters, 25% of the amount subject to partial payment is paid when the necessary documents are submitted. This amount is deducted from the State contribution account in the participant's contract. The State contribution payment is limited to the amount in the State contribution account of the relevant contract at the date of payment.

The right to partial payment can be exercised in cases of marriage, housing purchase, education and natural disasters. For the education status, a contract for those under 18 years old can be subject to partial payment on 01.06.2026. Therefore, partial payment in case of education is not currently practiced).

If the right to partial payment is exercised in case of marriage, housing purchase or natural disasters, a commitment is given that the contract will not be terminated with an exit transaction within 3 years from the date of partial payment, except in cases of retirement, death or disability. In case this commitment is not fulfilled; the State contribution amount paid within the scope of the right to partial payment shall be deducted from the amount to be paid to you together with the interest calculated according to the default interest rate specified in Article 51 of the Law on Collection Procedure of Public Receivables numbered 6183 dated 21/7/1953 as of the payment date.