Control and financement of the pension system in Turkey is being carried out by the Social Security Institution which is a relevant institution of the Ministry of Labour and Social Security.
Two fundamental pension reforms were made in Turkey in 1999 and 2008, and each reform changed the method of calculating pensions. As a general rule, each new reform has changed the “pension allocation rate” that was valid before it and has provided salary with lower consistent coefficients.
In order to calculate the pension in Turkey, factors such as working time, the amount of premium deposited on behalf of the person, the law to which the person is subjected, the duration of the employment and insurance status are all determinative. For the calculation of retirement age, the premium day and the insurance period are taken into account. With the latest retirement reform of 2023, the age condition for the insured who have entered to the social insurance system prior the date of 8th of September, 1999 is being annulled and these mentioned insured have become eligible for pension without an age requirement.
In the Turkish System, age, insurance period and premium day payment vary according to the date of commencement of the person’s social insurance. The working life of each employee is divided into three periods in salary calculation for a retirement pension. These three periods are as follows:
– Calculation of salary for the services prior 1999
– Calculation of salary for the services from 1999 to 2008
– Calculation of salary for the services 2008 on.
After the calculations in these three periods are made, the separately calculated monthly amounts are combined with the technical calculation methods and the monthly amount to be paid to the pensioner is determined by updating the nominal amount with inflation and GDP growth rates.
The pension calculation is calculated taking into account all earnings during the employee’s insurance period. Based on this calculation, the salary to be received by the pensioner is to be determined.
