With the new-period advantages of PPS, the savings you need for your retirement dreams are now much closer than ever...
The Private Pension System (PPS) is a system that enables you to save regularly and grow your savings through government contributions and fund returns.
20% state contribution is added to the contributions you invest in PPS.
In short: While you save, the system works on your behalf.
How Do Deductions Work?
The Private Pension System is a long-term savings and investment system.
During this process, deductions are applied for services such as fund management, operational processes, and account monitoring.
These deductions are grouped under three main categories:
These amounts are not determined freely by companies; they are applied within upper limits set by law.
First 5 Years
During the first 5 years of the contract, the following deductions may apply:
The total of these deductions is limited to 8.5% of the monthly gross minimum wage per year.
In addition, a Fund Total Expense Deduction applies depending on the funds you select.
This deduction is a natural cost arising from fund management.
More Advantages After the 6th Year
From the 6th year onward, the system begins to work more in your favor:
In other words, your costs decrease and your advantages increase over time.
From the 6th year onward, total deductions applied to your contract are limited based on your government contribution and cannot exceed the specified ratios.**
Refunds Begin for Fund Expense Deductions
From the 6th year onward, refunds apply to fund total expense deductions:
In short: The longer you stay in the system, the lower your costs and the higher your returns.
When determining the refund rate, the entire contract duration since 01/01/2013 is taken into account. No refund is applied for amounts below 1.1% of the current accumulated savings as of the deduction calculation date.
Important Reminders
Explanations
PPS: Private Pension System
According to the Circular dated November 30, 2015 (2015/50) issued by the Insurance and Private Pension Regulation and Supervision Agency (SEDDK):
If the contribution is not paid on time and is not completed within 3 months from the payment date, the contract is classified as “irregular payment.”
In this case, government contribution deduction controls are not applied when the contract is terminated.
* In the system, there is also a Fund Total Expense Deduction that varies depending on fund groups, as well as a fixed deduction paid to Takasbank and the Pension Monitoring Center (EGM), which exists in the system but is not applied by AgeSA.
In refund calculations, the total duration of the contract is taken into account. No refund is applied for amounts below 1.1% of the current accumulated savings. Additionally, only deductions made after 01/01/2021 are eligible for refunds. Refunds may also be made upon contract termination (withdrawal or transfer to another company), provided the conditions are met.
** From the 6th year of the contract onward, deduction controls begin to be applied. One of these controls is linked to the state contribution in the event of contract termination.
The total deductions applied from the contract’s start date until termination cannot exceed the amount calculated using the ratios specified in the regulation based on the state contribution balance at termination:
These controls have been applied since 01/01/2021.
The annual government contribution paid to a participant is limited to 20% of the annual gross minimum wage. Even if a participant has multiple pension contracts, the total annual state contribution cannot exceed this limit. Non–Turkish citizens are not eligible for state contribution.
For detailed information about our funds, please click here.
You can have access to the information regarding your contract via our Private Internet Branch at any time you wish so. Furthermore, the deduction information are also available in the Account Statements which are sent by mail and e-mail.
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