Law no 6740 on “Amending the Law on Individual Pension Saving and Investment System”[1] entered into force on 01/01/2017. Law no 6740 added “additional article 2” to the existing Law no 4632 on the” Law on Individual Pension Savings and Investment System”[2], which introduced compulsory automatic enrollment of employees in a retirement scheme by employers. On 02.01.2017, based on above-mentioned additional article 2, “Regulation on the Procedures and Principles of Automatic Enrollment of Employees into a Retirement Scheme by Their Employers”[3] is published in official gazette and entered into force.

Following points outlines cornerstones of IPS (BES/IPS refers to the voluntary private pension scheme, while OKS/AES refers to the employer-led automatic enrollment mechanism within the BES framework)

In order to initiate auto enrollment, employers are obliged to enter into agreement with a pension provider company which is approved by Ministry of Treasury and Finance. Pension funds, whether interest free or not, primarily will be decided by the employee. Employee’s preference is taken as a basis; if no preference is declared, the default fund/plan is applied under the relevant rules. Calculation, deduction and transfer of employee’s contrıbution to the pension provider company is under the responsibility of Employer. Moreover employer is responsible of any loss arising from late or non-transfer of contributions.

Scope of Auto-Enrollment (OKS)

Auto-Enrollment is applicable for every Turkish citizens (or those individuals within the scope of article 28 of Law no 5901 on Turkish Citizenship) who are under 45 years old and employed under the scope of articles 4 (a) and 4(c) of Law no 5510 on Social Security and General Health Insurance and their employers.

Incorporation of Public Sector Employees

In accordance with article 5 of the regulation, mandatory participation in the Individual Pension System for those public sector employees within the scope of articles 4 (a) and 4(c) of Law no 5510 on Social Security and General Health Insurance, who are employed in public agencies listed under the schedules (I), (II), (III) and (IV) of Law no 5018 on Public Finance Management and Control, will be effective on 01.04.2017. For those public sector employees employed other than above listed agencies, regulation will be effective on 01.01.2018.

Incorporation of Private Sector Employees

Article 6 of regulation requires gradual implementation of mandatory participation in Individual Pension System among the private sector employees. Those employees within the scope of regulation, will be gradually enrolled in a pension scheme by their employers in accordance with the number of staff in their workplaces.

Accordingly;

  • Auto-enrollment will be mandatory for those companies with 1000 and more staff on 1st January 2017.
  • Auto-enrollment will be mandatory for those companies with 250 – 999 staff on 1st April 2017.
  • Auto-enrollment will be mandatory for those companies with 100-249 staff on 1st July 2017.
  • Auto-enrollment will be mandatory for those companies with 50-99 staff on 1st January 2018.
  • Auto-enrollment will be mandatory for those companies with 10-49 staff on 1st July 2018.
  • Auto-enrollment will be mandatory for those companies with 5-9 staff on 1st January 2019.

The number of employees shall be determined on the basis of the total number of employees in one or more establishments of employer. Moreover once the employer is covered, reduction in the number of employees after the date of coverage will not be considered.

Calculation of Contribution

As per article 7 of regulation, amount of contribution shall be calculated as 3 % of Social Security Base or Pension Deduction of employee. In the calculation, decimals will not be considered. Contribution amount will be transferred to the pension provider company on behalf of employee on the first working day of following payment of employee’s salary.

For instance social security base of minimum wage is  33.030,00. Contribution amount of employee working with minimum wage will be,

33.030,00 * 3% ­= 990,90.

Contribution amount will be rounded by employee to 990 TRY and this amount will be deducted from net salary of employee.  

Right of Withdrawal

Pursuant to additional article 2 of Law no 4632, employees may leave the system within two months of joining. In the case of leaving pension scheme, employees may take a refund of their contributions within 10 working days. When employees change their jobs, their accumulated savings will be transferred to their new workplaces as well. However if new employer has no pension plan, employees, upon their requests, may continue to pay contributions based on their previous arrangements or may request termination of their pension plans until the end of next month of their job change.

State Subsidy

With Presidential Decision No. 10811 dated 6 January 2026, the state contribution rate in Türkiye’s Private Pension System (BES) for contributions paid in Turkish lira was set at 20%. The decision was published in the Official Gazette on 7 January 2026 and entered into force as of 1 January 2026.

This change does not remove or reduce state contributions already credited to participants’ accounts. Existing balances remain the same; the new rate applies to contributions paid from 1 January 2026 onwards, meaning that future state contributions are calculated at 20%.

The state contribution mechanism was introduced in 2013 with a rate of 25%. In 2022, the rate was increased from 25% to 30%. As of 1 January 2026, following the above decision, the rate has been reduced from 30% to 20%.

In practical terms, under the previous 30% rate, a participant contributing 1,000 TRY would receive 300 TRY as a state contribution (subject to the BES rules on vesting and applicable limits). Under the new 20% rate, the same 1,000 TRY contribution results in a 200 TRY state contribution, again subject to the same system rules.

The annual state contribution cap means that, within a single calendar year, the total amount of state contribution credited for a participant cannot exceed a maximum limit calculated per participant (not per contract). This cap is linked to the annual gross minimum wage in force for that year and is applied by aggregating the participant’s eligible contributions across all BES contracts; the resulting state contribution is then distributed among the participant’s contracts proportionally.

The maximum state contribution a participant can receive in a year is calculated as: Annual gross minimum wage × state contribution rate. For 2026, the monthly gross minimum wage is TRY 33,030, so the annual gross minimum wage is TRY 396,360 (33,030 × 12), and the state contribution rate for TRY contributions is 20%; therefore, the annual maximum state contribution is TRY 79,272 (396,360 × 0.20). To benefit from the full cap, the participant would need to pay TRY 396,360 in eligible contributions during 2026; if contributions exceed the amount needed to reach the cap, the excess contributions can be considered for the next year’s cap under the applicable rules.

In addition to the standard state contribution applied to contributions paid under the system, the Auto-Enrollment System (OKS) also includes two specific incentives that should be stated explicitly. First, participants who do not exercise their right to opt out (withdraw) within the applicable opt-out period are entitled to a one-off additional state contribution (currently TRY 500, as implemented under the relevant framework). Second, if the participant chooses to receive the pension savings in the form of an annuity (income insurance) for a minimum term of 10 years, an additional 5% state contribution may be granted, subject to the applicable conditions.

[1] Law no 6740 Date of Enactment: 10.08.2016  Published in the Official Gazette on 25 August 2016, No. 29812

[2] Law no 4632 Date of Enactment: 28.03.2001 Published in the Official Gazette on 07 April 2001, No. 24266

[3] Regulation on the Procedures and Principles of Automatic Enrollment of Employees into a Retirement Scheme by Their Employers, Published in the Official Gazette on 02.01.2017, No. 29936