MSI's Istanbul accounting member Promesa Denetim produced a detailed Q3 country report on Turkey outlining recent business, economic and tax developments.
Individual Pension SystemPurpose of the system
According to IMF data, ratio of national savings to the GDP is 22% in developed countries during 2015. However, it is lower than 15% in Turkey. New practice on Individual Pension System is targeting an increase in participation to the Individual Pensions System through employers and a result of to reach higher saving rates.
Latest regulation on automatic participation into Individual Pension System has been promulgated in the Official Gazette dated 25 August 2016. However, it will be effective at the start of 2017.
Automatic Individual Pension System is covering Turkish citizens and people employed with a service contract pertaining to the Article 4/A of Social Security Law and people employed within the scope of Articled 4/C of the same law.
Scope and principles of the system
An age limit of 45 has been defined within the law. Employees who start to work as of January 1 2017 and under 45, will be included in a pension scheme. In addition to the people employed starting from January 1 2017, the people being already employed under 45 as of 1 January 2017 should be integrated into the system automatically.
Read more about Turkey: Q3 Report 2016
