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

18

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

20

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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