Automatic Enrollment

Automatic Enrollment an Individual Pension System targeting that every Turkish Republic citizen younger than 45 years old who is employed by the private or public sector will make additional saving in addition to their pensioning system through their employers and will enjoy a second source of income in their retirement.)

The main advantage of this system, which is also called mandatory aka Compulsory IPS, is the one-time 1000 TL subsidy by the state. The Automatic Enrolment system is a compulsory practice.

The following contributions are provided to the employee by the policy:

  • A state subsidy at 25% of the paid contribution;
  • In case the employee decides to remain in the system by the end of the 2 months, an additional state subsidy of 1,000 TL;
  • In case the employee chooses to use his pension rights by buying minimum 10-year income insurance, an additional state subsidy equal to 5% of his savings. 

The state contribution is calculated as a commitment and recorded in the employee's state contribution account. These pledged amounts are paid in cash to the employee's account associated with the state contribution according to the entitlement rates determined below, depending on the duration of the contract in the system.

The employee gets right to use the amount in the automatic enrollment state contribution account in the following rates;

15% of those amounts credited to the automatic enrolment state subsidy account will be vested to the employee on the condition that he does not opt-out of the system for minimum 3 years;

- 35% will be vested to the employee on the condition that he does not opt-out of the system for a minimum of 6 years;

- 60% will be vested to the employee on the condition that he does not opt-out of the system for minimum 10 years;

- 100% will be vested to the employee upon retirement, death or disability.

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