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Private Pension Contract (PPS) Private Pension Contract (PPS)

Private Pension Contract (PPS)

A peaceful retirement awaits you with the system in which savings are evaluated with interest sensitivity and savings are supported by state contribution.

What is Private Pension Contract (PPS)?

The Private Pension System is a savings and investment system that aims to provide you with an additional income opportunity during your retirement, and allows you to maintain the standard of living you have in your working life during your retirement. The system is based on voluntary participation.

It is not an alternative to the Public Social Security Systems, but a supplementary pension system that you can generate extra income. It is a system that allows you to receive a collective savings or retirement pension during your retirement period by utilizing a certain part of the income you will earn during your active working period. The savings you have made in the Private Pension System are invested in the pension investment funds you have chosen and are managed by portfolio managers who are experts in their fields.

The savings you will gain in this system will vary depending on the savings you will make regularly in the system and the duration of your stay in the system. In addition, as of 22 January 2022, a 30% State Contribution, which is not available in any other investment instrument, started to be applied. As of this date, for every 100 TL of savings you will make, the State will deposit 30 TL into your sub-account.

What is its Content?

What is its Content? Financial instruments included in interest-free pension investment funds;

  • Participation accounts to be opened in participation financial institutions,
  • Stocks suitable for the participation index
  • Gold and precious metals
  • Interest-free security investment funds
  • Interest-free debt instruments such as sukuk, lease certificates, etc., issued in Turkey or abroad.

Private Pension State Contribution

As of 22 January 2022, a brand new era started in the Private Pension System. Now, 30% State Contribution, which is not available in any other investment instrument, will be added by the State to each contribution you deposit, and the State will deposit 30 TL into a sub-account for every 100 TL. All citizens of the Republic of Turkey, blue card holders, and participants whose employer is not the payer, who have completed the age of 18, will be able to benefit from the state contribution, whose monthly upper limit will be 30% of the Gross Minimum Wage.

Entitlement periods for the contribution paid by the state:

  • If the system is left within the first three years, the right cannot be earned.
  • 15% at the end of the third year,
  • 35% at the end of the sixth year,
  • 60% at the end of the tenth year,
  • All if entitled to retirement.

DDepends on the Time Spent in the System for State Contribution Entitlement

  • If the system is left within the first three years, the right cannot be earned.
  • For the period before 1 January 2013;
  • 1 year for participants who have been in the system for more than 3 years but less than 6 years,
  • 2 years for participants who have been in the system for more than 6 years but less than 10 years,
  • A 3-year entitlement period is added to participants who have been in the system for more than 10 years.
Monthly Contribution Amount State Contribution Annual State Contribution
150 TL 45 TL 540 TL
300 TL 90 TL 1080 TL
600 TL 180 TL 2160 TL
900 TL 270 TL 3240 TL

To benefit from Life Clubs services, which vary according to retirement plans, simply call the Communication Center on 0850 202 2020. (You can contact the Communication Center by dialing 3 and 2 respectively.)

Monthly Contribution Share Total Portfolio Size
Health Club 150 TL -
Elite Club 500 TL or 50.000 TL
Elite Plus Club 1000 TL or 100.000 TL

A Comfortable Retirement, Trust, Transparency, Statement's 30% Participation Advantage, A Voice in Decisions Affecting Your Income, Right to Suspend Payments, Services from Licensed Intermediaries, Professional Fund Management, Employer Group Pension Agreements, Transfer of Your Savings to Another Company, and Right to Merge Accounts

The Private Pension System enables individuals to direct their savings to long-term investments and to obtain the right to a second retirement with an additional income to increase their welfare level during the retirement period.

One can be entitled to retirement, provided that he/she has been in the system for at least 10 years from the date of entry in the Private Pension System and has completed the age of 56. With the new regulations introduced as of 22 January 2022, anyone who is a citizen of the Republic of Turkey (employed or unemployed) and who has reached the age of 18 can enter the system and benefit from the 30% state contribution. With the amendment made on 7 June 2013, with effect from 1 January 2013, the way for blue card holders to benefit from the state contribution advantage was paved. The private pension state contribution amount that a participant can receive in a calendar year cannot exceed 30% of the gross minimum wage amount for the relevant year. Since the gross minimum wage amount for 2024 is 240.030,00 TL in total, if you pay a contribution of this amount, the State will make a maximum contribution of 72.009,00 TL, which corresponds to 25%, on your behalf. The upper limit for the amount of state contribution is applied on a participant basis. The state contribution amount calculated for the total contribution amount paid by the participant who paid contributions to more than one contract in the same period is distributed to the contracts according to the weight of the contribution paid per contract in the relevant month. The amount of contribution paid within a calendar year to be taken into account in the calculation of state contribution is equal to the annual gross minimum wage. Anyone who pays contributions, whether they are taxpayers or not, can benefit from the state contribution.

An entitlement period is added to the pension contracts of the participants who entered the Private Pension System before 01.01.2013 and are in effect as of 01.01.2016, depending on the period they have spent in the system in order to benefit from the state contribution. As of the 6th year of the contract, the company returns 2.5% of the deductions made as Fund Total Expenses. The rates between the 7th and 14th years are applied every year by increasing the refund rate valid in the previous year by 2.5 points. A fixed 25% refund is applied after the 15th year. Refunds are not applied for the portion below 1.1% of the current savings as of the relevant date. While determining the return rate, all periods spent in the contract as of 01.01.2013 are taken into account.

You can change your pension plans a maximum of 4 (four) times a year. You can change the distribution ratios or amounts of your savings and paid contributions in your private pension account between funds 12 (twelve) times in a year.

You can transfer your savings under the pension contract, which remains with the same company for 2 (two) years from the effective date, to another pension company. It is sufficient to stay in the relevant company for 1 (one) year in order to transfer the contracts with the offer form signed before 01.01.2013. You can combine your retirement accounts opened in the same or different companies if you gain the right to retirement. You have the right to withdraw within 60 (sixty) days after you sign the offer form or the approval of your offer in distance sales.

You can leave the system at any time before you qualify for retirement. If you leave the system early, withholding tax and entry fee deductions, if any, are made from your savings. You can stop paying your contribution at any time. If no payment is made to the relevant account within three months following the payment date of the unpaid contribution, it is considered that the payment is suspended in the relevant contract. If the payment is suspended, the suspension deduction is applied during the suspension period, depending on the nature of the Pension Plan that the participant is included in.

In case of suspension of payments for more than one year, fixed expenses paid by the company to the Pension Monitoring Center in relation to the private pension account, provided that it is specified in the pension plan, can be deducted from the participant's savings. Even if the contribution payment is suspended, the savings continue to be utilized in the pension investment funds selected by the participant, and they cannot benefit from the state contribution during the suspension period. After qualifying for retirement, you can receive your savings either as a lump sum, as a monthly salary, or some as a lump sum and some as a salary.

It is managed by a portfolio management company determined by Türkiye Hayat ve Emeklilik AŞ as required by the Private Pension legislation.

By contacting the pension company with which you have your current pension contract, you can request an account statement and transfer request form, and send us the documents you have received in this context.

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