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 IN T U R K E Y

Transcription

1 H E A L T H W E A L T H C A R E E R 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 IN T U R K E Y June.2018

2 C O N T E N T S Auto Enrolment System Employee Rights and Responsibilities MERCER

3 AUTO ENROLMENT (C) MERCER MERCER

4 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; 1,000+ Employees Employees Employees Employees Employees 5-9 Employees January 2017 April 2017 July 2017 January 2018 July 2018 January 2019 Headcounts will be based on the tax registration number of the entities MERCER

5 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 ) MERCER

6 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 MERCER

7 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 Severance Pay Premium Commission Bonus Termination Pay Non-cash Grants Life and Health Insurance MERCER

8 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 = ,40 TL %3 456 TL MERCER

9 C U R R E N T P E N S I O N A C C O U N T Current Pension Account Auto Enrolment 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. MERCER

10 S T A T E C O N T R I B U T I O N + 5% x2 + 1,000 TRY - 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) MERCER

11 S T A T E C O N T R I B U T I O N Current Pension Account Auto Enrolment Cash State contributions are paid cash by government to current pension contact at the next month of contribution paid. Deposit 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. MERCER

12 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 Year Vesting 3 %15 6 %35 10 %60 10 Year + 56 Age %100 The initial contribution of 1,000 TRY and the state contributes 25% will be same progress payment periods. MERCER

13 EMPLOYEE RIGHTS AND RESPONSIBILITIES (C) MERCER MERCER

14 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. MERCER

15 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. MERCER

16 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 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. Period in PensionSystem Tax Deduction (from Earnings) Before 10 years %15 After 10 years %10 Retirement: (10 years in Pension system + 56 age) %5 Legal time for completing withdrawal process is 20 working days. MERCER

17 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. MERCER

18 S U S P E N S I O N 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. MERCER

19 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 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. MERCER

20 F U N D S E L E C T I O N Beginning Funds Interest Fund Non-Interest Fund 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. MERCER

21 F U N D S E L E C T I O N Other Funds Interest Fund Non-Interest Fund 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 20 MERCER

22 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. MERCER

23 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. MERCER

24 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 ; Employee AvivaSA Emeklilik ve Hayat A.Ş. Call Center Web Site MERCER

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