The Turkish government aims to start the operations of the Supplementary Retirement System (TES), a mandatory scheme, in the last quarter of 2025, according to local media reports.
TES is an additional pension system that aims to prevent a fall in living standards due to the loss of income during retirement. Contributions to an employee's individual TES account, when the scheme starts operations, will be made by the employee, the employer and the state. Regulations will be effected to allow the withdrawal of retirement funds and exit the system only by those who meet the terms and conditions required for retirement.
The Insurance and Private Pension Regulation and Supervision Agency (SEDDK) is working at "full speed" to implement the scheme. The views of the Insurance Association of Turkiye (TSB) and pension companies will be gathered for the proposed TES model. After SEDDK finalises the model, legislation will be drawn up. After the law on TES is enacted, a certain period will be given for it to be put into practice. Therefore, it is noted that the start of the scheme could be in the last quarter of 2025 or perhaps 2026 at the most optimistic estimate.
TES is the second pillar of the three-pillar retirement system in Turkiye. The first pillar is the Social Security System, while the third pillar is the voluntary Individual Retirement System. The Automatic Participation System (OKS), which started in Turkey in 2017, is a second-pillar retirement scheme. However, although entry is mandatory, participants can exit it easily, There is no employer contribution, and therefore the system does not meet expectations sufficiently.
In addition, regulations that will develop individual retirement and automatic participation systems will be implemented increase savings awareness and knowledge of financial products.
Criteria
Mr Gokhan Sertsoz, a deputy general manager at BNP Paribas Cardif Turkiye, previously said that it was not easy to estimate the number of participants in the TES because all the details have not yet been released.
“There will be two important criteria for success here,” he said. First of all, as I mentioned earlier, we need all the details to be clarified for the healthy operation of the system. The second criterion will be to increase the savings power of employees under current economic conditions.”
The implementation of TES has been delayed for several years since it was proposed before 2020.