With the Amendment Made in Individual Retirement Savings and Investment Law by Code No:6740, Individual Retirement is Becoming Mandatory for Those Who are Employed and Under the Age of 45

The new regulation for automatic accession to individual retirement has been sent to Grand National Assembly of Turkey. According to this new regulation for Those Who are Employed and Under the Age of 45 automatic individual retirement will be brought and those who are currently employed and under the age of 45 will be able to automatically access individual retirement. Wage cut to the contribution amounting the 3% of the real income will be added to the individual retirement system and right of withdrawal within 2 months will be brought to the employees Automatic accession to individual retirement will be effective from the date of 01.01.2017. according to the draft with 50 million capital asset management fund will be founded and capital of this foundation will be provided from privatisation fund.

Deputy Prime Minister Mehmet Şimşek have said that the employees under the age of 45 will be mandatorily included to Individual Retirement System(IRS) by their employers in his previous statement regarding individual retirement. According to this plan wage cut of 100 TL will be applied employees and this money will be saved in their personal accounts that will be opened, and will be put to good use in their retirement funds.

The previous statements from even before had stated that employees will be able to log out f after 6 moths if they wish to. The latest proposal sent to the Assembly shows that this period dropped to 2 months.

Employees will be able to get back both the money they saved and its premium when logging out from the system. In other words, accession to the system is mandatory but logging out is also available.

All in all, employees that weren’t in the IRS before will be included to the system mandatorily and all who are included will be have a wage cut of 100 TL for the first 6 moths. Age limit is brought to the new system and it will comprise the ones under the age of 45.

Related Code No:6740 published in the 25.08.2016 dated official gazette can be found in here:

http://www.resmigazete.gov.tr/main.aspx?home=http://www.resmigazete.gov.tr/eskiler/2016/08/20160825.htm&main=http://www.resmigazete.gov.tr/eskiler/2016/08/20160825.htm