12.09.2025 10:10
With the TES system announced by President Erdoğan, severance pay rights will be protected, and employers will deposit 3% of the salary into the employee's fund account. Employees will be entitled to retirement at the age of 60 and can receive a lump sum payment of up to 25% of their savings. There will also be an option for early withdrawal of up to 10% in cases such as marriage, unemployment, and first home purchase.
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President Erdoğan announced the Complementary Pension Insurance (TES) system, which will protect existing severance pay rights and provide additional retirement income for employees. The new regulation aims to end severance lawsuits and enable employees to earn higher income upon retirement.
SEVERANCE RIGHTS UNDER GUARANTEE
With the TES system included in the Medium-Term Program, employees' acquired severance pay rights will be protected. By ensuring that resigning workers can also receive their rights, the long-standing lawsuit processes will come to an end. Employees who leave their jobs after January 1, 2022, will also be able to receive their severance pay from previous periods.
3% CONTRIBUTION FROM EMPLOYERS
The existing severance pay right of 5.33% (19 days) will continue as is. In addition, employers will deposit 3% of the gross salary into the individual fund account on behalf of the employees every month. Thus, a resigning employee will be able to take both their severance pay and the accumulated amount in the fund account as acquired rights.
RETIREMENT AT 60, ADDITIONAL INCOME OPPORTUNITY
Participants in TES will be entitled to retirement when they reach the age of 60. A lump sum payment of up to 25% may be made to those who request it from the accumulated amount in the account. A minimum wage employee who stays in the system for 25 years will receive an additional income of between 300 and 566 lira in their retirement pension thanks to TES.
EARLY WITHDRAWAL IN SPECIAL CASES
Participants who have not reached the age of 60 will also be able to withdraw up to 10% of their savings in cases such as first home purchase, marriage, serious illness, or unemployment.
END OF LAWSUIT PROCESSES
The new system aims to strengthen employees' severance rights and prevent the frequent severance pay lawsuits encountered in the business world. TES will play a complementary role in the social security system, contributing to employees earning higher income upon retirement.
IMPLEMENTATION DATE, MANDATORY STATUS
- TES is planned to come into effect by the last quarter of 2025.
- The system will likely be mandatory; participation is recommended for everyone.
- The conditions for entering and exiting the system are not clear; it is stated that in some cases (such as marriage, unemployment, serious illness, first home purchase), it may be possible to withdraw part of the savings.
POTENTIAL IMPACTS / DISADVANTAGES
Advantages:
- Additional security against the risk of income decrease in retirement.
- More systematic protection of employees' severance pay rights.
- Increased individual savings, providing resources for fund management and the finance sector.
- Preservation of living standards; reduction of income uncertainty after retirement.
Disadvantages / Risks:
- Deductions from salaries may create a burden for employees.
- There is a risk that the accumulated amount may not meet expectations due to factors such as fund performance, inflation, and investment returns.
- If the transition from existing systems is not carried out smoothly, there may be rights losses or uncertainties.
- If it is a mandatory system, there is a possibility of limiting individual preferences and creating a reaction against "mandatory" participation.
RETIREMENT CONDITIONS / AGE AND DURATION
- According to the proposals, a minimum of 10 years of premium payment is required to benefit from TES.
- There are also proposed figures for the retirement age; some sources mention 56 years, while others suggest 60 years.
WHO IT COVERS / WHO WILL BENEFIT
- TES may cover individuals in different statuses such as private sector employees (4/A) and public employees (4/C).
- There are differing opinions regarding Bağ-Kur employees (4/B); some writings indicate that Bağ-Kur members will initially be excluded from the system.
- Participation of employees in all statuses is expected to be mandatory; options for exiting the system may be more limited.
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