Turkey: Wage earners to stay in private pension system for 3 years
Source: Middle East Insurance Review | Nov 2018
The New Economic Plan (YEP) presented by Treasury and Finance Minister Berat Albayrak in September includes changes to the regulation of the Private Pension System (BES), requiring wage earners to stay in the plan for three years.
The regulation stipulating the automatic inclusion of workers in BES by their employers will be restructured to be more sustainable, reported Daily Hurriyet News citing the new economic plan.
BES, which took effect in 2017, envisages the automatic inclusion of all Turkish wage earners younger than 45 into the system by their employers. Workers who do not want to be a part of the system were able to exit during a two-month period and their savings were returned.
However, after the system went into effect, 60% of 12m workers included in the system withdrew from the plan willingly, pushing the government to pass the new regulation.
Under the new economic plan, employees will be obliged to stay within BES for three years without the option to withdraw. The monthly premiums will be deducted from the monthly salaries of wage earners and given to insurers. M