As it is known, a retirement reform is on the agenda of the Turkish labour life. In this regard, the Ministry of Labour and Social Security of the Republic of Turkey is currently preparing a new regulation bill regarding “Employees waiting for retirement age” (also known as EYT in Turkey).
According to the Turkish Social Security Law, there are three conditions for receving an old-age pension in Turkey: (i) Fulfilling certain insurance period, (ii) fulfilling certain number of premium payment days and (iii) fulfilling a certain age. Those who are not old enough to retire but fulfilled the other conditiones are known as EYT(employees waiting for the retirement age) in Turkey.
Preparations on this issue are currently being carried out by the Ministry’s and the Social Security Institution’s bureaucracy, and the amendmend bill is expected to come to the agenda of the Turkish Grand National Assembly as of December 2022 and to be enacted as of January or February 2023.
The prospective retirement reform regulation is expected to provide the opportunity for retirement without waiting an age condition for the employees who were insured for the first time before the date of 8th of September, 1999.This has the potential to create an experienced personnel shortage for companies due to retirement of the employees with high seniority, in addition to the burden of payments of severance pay to retiring personnel.
The EYT members could be able to keep on being within the working life after their retirement. If these insurance holders continue to work with an employer, Social Security Support Premium is applied to them.
What are the advantages/disadvantages for the employer of employing a retired worker in the workplace within the scope of the Forthcoming Retirement Reform?
Although it will vary from workplace to workplace and in accordance with the economic sector in which the workplace operates, the advantages for employers of continuing to work in the workplace for workers who have retired within the scope of the expected pension reform can be listed as follows:
- By continuing to work with experienced personnel who know the workplace and are familiar with the job, personnel replacement costs will be eliminated.
- Loss of talent and memory will be prevented in the workplace.
- Employees with a fixed income in the form of a pension will be able to agree to work on favorable terms for employers after retirement.
On the other hand, the disadvantages of employers continuing to work with retired workers can be listed as follows:
- There will be no room for younger personnel waiting for promotion as the retirees keep on working.
- Employees who have a legal guarantee in the form of a pension may have less work motivation and show less productivity.
- Workplace commitment of the employee whose severance pay is liquidated may be low (as the severance pay is liquidated for the retiring personnel compulsorily).
In sum, The EYT members could be able to keep on being within the working life after their retirement. There are some advantages and disadvantages for employers to keep on working with retired employees within the expected retirement reform. The final decision would be up to employers.
