Employer action code: Monitor
According to the Presidential Annual Program for 2026, a new supplementary retirement system with required employer contributions will be launched in the second quarter of 2026. In the meantime, parliament is also considering various proposed changes to the country’s tax and social security framework to strengthen social security’s long-term financial sustainability.
Key details
A new private Supplementary Retirement System (Tamamlayıcı Emeklilik Sistemi, or TES), whose launch has been on the government’s agenda for several years, would replace the existing private Automatic Enrollment System (Otomatik Katılım Sistemi'ne, or OKS). Expected key TES features are as follows, though draft rules have not yet been released and final provisions may differ:
- All employers would have to automatically enroll all their employees in TES. Currently, under OKS, employees are only required to auto‑enroll employees under age 45, who may then opt out. Whether employees would be able to opt out of TES participation is not yet clear. Employees already enrolled under OKS would automatically be transferred to TES
- Employers would be required to contribute 2.0% of covered pay to their employees’ individual TES accounts; employees would contribute 3.0%, and the government would contribute 1.0%. Currently, employers do not contribute to employees’ OKS accounts, while employees contribute at a 3.0% rate and the government contributes 30% of the employee’s contribution
- Funds would be available for retirement for women age 58 or older and men age 60 or older, after at least 10 years of TES participation
- The government has indicated that the implementation of TES would not affect the existing mandatory severance entitlement
Proposed changes to social security under the Draft Law on Amendments to Tax Laws, Certain Other Laws and Decree-Law No. 63 include:
- Increasing employer social security contributions for retirement, death and disability benefits, from 11% to 12% of covered pay
- Raising the social security monthly earnings ceiling for all contributions and benefits, from 7.5 times to 9.0 times the monthly minimum wage
- Reducing the discount on employer social security contributions for retirement, disability and death from 4.0% to 2.0% for non‑manufacturing companies with no outstanding debt to the Social Security Institution. The 5% discount for manufacturing companies would be unaffected
- Empowering the president to change the state contribution rate to voluntary retirement accounts under the Individual Retirement System (BES), currently equal to 30% of the member’s contribution, to potentially increase it to up to 50% or reduce it to zero
Employer implications
Employers should monitor the publication of any laws or regulations on the proposed TES system. Previous TES trial balloons (announced as part of long-term government planning reports) that proposed replacing severance benefits with new individual retirement accounts met with significant resistance from unions and employees over the potential loss of severance entitlements and never made it to parliament as draft legislation. The latest proposal may have better prospects since severance is unaffected, but employers may be less supportive. The proposed changes to social security are with parliament and are scheduled to take effect on January 1, 2026, if approved. The measures would increase labor costs for employers and the social security tax burden on employees; companies should ensure their payroll providers are ready to adjust contributions to social security and individual retirement accounts.
