The Private Pension System constitutes a safe and profitable pension system by virtue of which you will make regular savings and increase the value of your savings by virtue of the state subsidy in order to enhance the future from today.
Let us examine what the private pension with AgeSA is and what its benefits are.
How would you consider a retirement period in which you will be able to cover your additional expenses easily and you will be able to achieve your dreams in an easier manner by virtue of your increasing savings? The Private Pension System which was established in addition to the current public social security systems is just for this purpose.
In the Private Pension System, your savings are invested in the mutual funds while they increase in value by virtue of the %30 state subsidy. Your savings which do not lose their values by means of your regular payments generate income above the inflation rate in the long term. Furthermore, your participation in the Private Pension System can be shaped in accordance with your standards and expectations.
On a monthly, 3-month, 6-month or an annual basis... It will be determined according to your preference. The Private Pension System contribution amount whose payment period will be determined by you shall be regularly collected via your credit card or bank account. In this manner, you will be able to make savings in accordance with a certain discipline.
ISSUES WHICH DISTURB MY MIND
What is the Private Pension System?
The Private Pension System constitutes a special pension system which ensures that the persons become able to channel the savings made by them during their active working period to long-term investments and to generate an income which makes it possible for them to maintain their living standards in their retirement periods. Persons can generate income in addition to their retirement income provided by the social security system by participating voluntarily to this system.
When was the system commenced??
The Private Pension Savings and Investment System Law was enacted on 28 March 2001 and it was published in the Official Gazette dated 7 April 2001 and numbered 24336. The law entered into force on 7 October 2001 which constitutes the date 6 months subsequent to its publication date. Upon the certification of the first pension plans on 27 October 2003, the pension companies commenced their activities.
What is the objective of the Private Pension System?
The primary objective of the Private Pension System is the generation of an additional income in the retirement period by channeling of the savings aimed at private pension to investments. Thus, the private pension system increases the wealth level of the persons in their retirement periods in which their active working lives have come to an end. The system also contributes to the development of the country by creating long-term resources for the economy.
Is it necessary to be registered before the Social Security Institution or to be in working status in order to participate in the system?
Everyone possessing the legal capacity is able to participate in the system. In terms of the Private Pension System, there is no condition with regard to being registered before the Social Security Institution or being in the working status. The Private Pension System constitutes the supplementary constituent of the compulsory social security system.
Does the Private Pension System provide the health, etc. services such as provided in the Social Security System?
Subsequent to participating in the Private Pension System, do the rights existent in the social security system lose their validities?
No. In terms of the Private Pension System, there is no condition with regard to being registered before the Social Security Institution or being in the working status. The rights arising from the social security system shall continue.
Is the Private Pension System a safe system?
The Private Pension System constitutes a system which was established upon examination of the best practices in Turkey and the world, that was assured by the state and which functions so well that it can be cited as an example. The pension activities of the companies is subject to the supervision of the Undersecretariat of Treasury and the accounts and transactions with regard to the company funds, portfolio managers and custodians is subject to the supervision of the Capital Markets Board (CMB).
Within the Private Pension System, what happens if any pension company faces financial problems?
Pursuant to article 17 of the Private Pension Savings and Investment System numbered 4632, “The funds assets cannot be put in pledge, they cannot be provided as collateral except for the transactions made with respect to the fund, they cannot be sequestrated or included in the bankrupt’s assets.”
Is the death coverage available in the Private Pension System?
No. The death coverage is not available in the Private Pension System. However, in the case where the participant deceases within the contract term, the savings of the participant, state subsidyand all yields of the participant shall be paid to the beneficiaries or legal heirs stated in the pension contract if available.
What is the private pension contract?
The private pension contract constitutes the contract which regulates the procedures and guidelines related to opening an private pension plan with the company, payment of contributions to the account, investment in preferred funds of the contributions paid and payment of the financial amounts accumulated in the account to the right owner and other rights and obligations of the parties.
How many types of private contracts are available? Who are the parties of the contract?
The private pension contract: Constitutes the contract within the scope of which the company and participant are available depending on the private pension plan. Private pension contract dependent on the group: Constitutes the contract within the scope of which the company and participant are available depending on the group pension plan. Employer group pension contract: It constitutes the contract which is signed between the sponsor corporation and the company on the basis of an employment relationship or for the benefit of the participant and pursuant to which the contribution is paid is by the sponsor corporation on behalf of the participant.
How can the pension right be deserved within the system?
Provided that the participant will be present in the Private Pension System for at least 10 years as from the date of entry in the system and that the participant has completed the age of 56, he/she will qualify for the pension.
In the case where more than one contracts are available, would the exit from the previous contract affect the qualification for the pension?
Yes, the period of staying in the system which arises from the terminated contract shall be inapplicable. The date of entry in the system shall be amended as the earliest contract which is still in force.
Is the right to purchase more than one pension contracts within the Private Pension System is available?
Yes. It is possible to purchase more than one pension contracts from the same company or from different companies.
Who can be chosen as beneficiaries within the Private Pension System?
The participant can designate the person or persons chosen by him/her as the beneficiary/beneficiaries The beneficiary/beneficiaries shall be stated in the contract. In the case where the beneficiary is not designated and the participant deceases, the savings shall be paid to the legal heirs of the participant.
Are the paid contribution amounts channeled to investment immediately?
The paid contribution amounts are channeled to investment on the second business day at the latest following the transfer of these amounts to the accounts of the company upon the provision of the required instructions with regard to the funds which are determined by the participant or the sponsor contribution if available.
Is it possible to make interim payments apart from the regular contribution payments?
The participant can make payments to his/her private pension account apart from the regular contribution amount at any time he/she wishes.
In which investment instruments the contribution amounts which are paid within the Private Pension System are invested?
The contribution amounts which are paid by the participants are invested in the funds established by the pension companies. The money market and capital market instruments which can be comprised in the fund portfolios are as follows:
Is it possible for the company to determine the investment preference in terms of the persons who do not wish to make any fund preferences?
The standard fund which is determined within the scope of the plan can be presented to the participants who do not make any fund preferences. With respect to the fund portfolio which is defined as the standard fund;
How can the contribution amount payments be executed?
The contribution amount payments can be executed by means of the payments instruments stated in the contract. The instruments such as the automatic payment order which is given to the bank branch and credit card are frequently used.
Is it possible to change the fund distribution rates of the contribution amounts?
The distribution rates or amounts among the funds of the savings available in the private pension account and the paid contribution amounts can be changed maximum six times a year.
Can the fund distribution be changed?
The distribution rates or amounts among the funds of the savings available in the private pension account and the paid contribution amounts can be changed maximum six times a year.
Can the savings available in the Private Pension System be sequestrated?
The savings amount which corresponds to the multiplication of the number of months in which the participant is available in the system and the gross minimum wage amount applicable on the date of sequestration, pledge or bankruptcy cannot be sequestrated, put in pledge or included in the bankrupt’s assets except for the alimony debts.
What is the pension mutual fund?
The pension mutual fund constitutes the mutual fund in which the contribution amounts which are paid for pension are channeled to the investment. The pension mutual funds are established by the pension companies they are managed by the portfolio management companies.
What is the difference between the pension mutual funds and other investment funds?
The pension mutual funds are specifically established for the investment and management of the contribution amounts paid in the Private Pension System. These funds can only be purchased by the persons who enter in the Private Pension System. The withholding tax is not applied in terms of the profits made by the pension mutual funds. These funds are managed pursuant to investment strategies comprising longer terms.
Are there any restrictions in terms of the pension funds subject to investment?
No, it is possible to make investments to the preferred funds without being subject to any minimum and maximum limits. Therewithal, investment restrictions in parallel with the fund strategy in accordance with the risk return expectations of the participants in the target group can be available in the pension plans.>
Do the Pension Mutual Funds vary according to the type of the pension contract (group or private pension)?
The funds can be established in the form of group pension mutual funds in which the private pension mutual fund and fund shares aimed at the individual participants are allocated to the participants, persons or groups who/which are defined in the pension contract. Group pension mutual funds can be established on the basis of workplace or certain occupational groups on a sectoral basis and provided that it will be considered appropriate by the Capital Markets Board, by means of distribution of the fund shares to certain persons or groups.
How can the fund distribution be changed?
The participant can change the distribution rates or amounts among the funds of the savings available in the private pension account and the paid contribution amounts maximum 6 times a year. The change request which will be made accordingly can be executed in written form or via the call center of the company or through the secure page which is established on behalf of the participant in the website of the company.
What is the commencement date of the state contribution?
With regard to the contribution amounts which have been paid since 1 January 2013, the state subsidy is calculated.
Are there any upper limits in terms of the state subsidy to be calculated?
Yes, the state subsidy amount which can be received by a participant within a calendar year cannot exceed 25% of the gross minimum wage amount concerning the relevant year. The limit calculation shall be executed on the basis of participant.
Can the persons who pay the contribution amounts but do not pay the income tax receive state contribution?
Yes, all persons who pay contribution amounts to the private pension contracts or the private pension contracts dependent on the group can benefit from the state subsidy within the determined limits.
What is required to be executed in order to benefit from the state contribution?
To benefit from state contribution, there are not any special procedure to be followed by the participant after the payment of the contribution amount. The calculation of the state subsidy amount is automatically executed in terms of the paid contribution amounts and no statement or notification of the participant is sought.
In terms of the contribution amount payments which are executed by means of the credit card, is the state subsid yamounts is calculated at the time of collection via the credit card?
No, the month in which the contribution amount is transferred to the accounts of the company at the end of the blockage period in terms of the collection shall be taken into consideration with regard to calculation of the state contribution.
When will the state subsidy amount which is calculated in terms of the paid contribution amount be deposited to the account?
The state subsidy amount shall be transferred to the pension account within 3 months subsequent to the payment date of the contribution amount.
Is the state subsidy amount which is available in the account be refunded to me in case of death?
In this case, the participant shall be entitled to the entire amount available in the state subsidy account. This amount shall be paid to the beneficiary or beneficiaries who are determined by the participant.
When did the new period commence in the Private Pension System?
The new period in the Private Pension System (PPS) commence on 1 January 2016.
What are the fundamental changes which are made within the scope of the Private Pension System?
Along with the new period of the Private Pension System, the deduction structure has been subjected to change.
What are the differences between the previous and new period of the Private Pension System?
You will be more profitable so long as you stay for longer periods within the system. In the case where you leave your contract within the first 5 years, the defined deductions shall be executed in your plan. However, in the case where you leave your contract subsequent to the 5 th year, both the Fund Total Fee refunds shall be commenced and the deduction controls regarding the State subsidy shall be executed. For the reason that you will be entitled to the refunds according to these controls, you will be profitable.
What is state contribution?
The state subsidy means the transfer of the additional amount at the rate of 25% of the contribution amount deposited by the PPS participants to a separate account which is opened on behalf of the participant.
To whom the state subsidy is provided?
“The state subsidy is provided with regard to the contribution amounts which are paid by the participants who are the citizens of the Republic of Turkey, who lost the Turkish citizenship by obtaining the permission with regard to ceasing the Turkish citizenship and their descendants or on behalf of these persons regardless of being a taxpayer or not. The maximum state subsidy which can be benefited by the participant is limited with 25% of the total gross minimum wage with regard to the relevant calendar year.”
How do the participants collect the state subsidy amount?
The state subsidy amount has been deposited by the Undersecretariat of Treasury to the accounts of the private pension participants which are opened by their companies on a monthly basis as from 1 January 2013.
Is any limit applicable in terms of the state subsidy which can be benefited by the participants in the new Private Pension System?
By means of the new regulation, 25% of all contribution amounts which are deposited to the Private Pension System are added to the private pension accounts of the participants as the state subsidy amounts. The maximum state subsidy which can be benefited by the participant is limited with 25% of the total gross minimum wage with regard to the relevant calendar year.
Will the persons who entered the Private Pension System prior to 1 January 2013 be able to benefit from the state subsidy as well?
The private pension participants will be able to benefit from the state subsidy as from 1 January 2013. No contributions shall be provided with respect to the previous periods.
What is the entitlement period in terms of the state contribution?
The state subsidy constitutes an application which is implemented in order to incentivize the participants to stay in the system for long periods. For this reason, restrictions are stipulated with regard to entitlement of the state subsidy in case of early exit from the system. In the case where the applicable period of the pension contract in the system as from 1January 2013 is from three years to six years, the participant will be entitled to receive 15% of the state subsidy and yields, in the case where the applicable period is from six years to ten years, the participant will be entitled to receive 35% of the state subsidy and yields and if the applicable period is ten years and more, the participant will be entitled to receive 60% of the state subsidy and yields. In the case where the applicable period is longer than 10 years and after the age of 56 for the participants, in other words when the participant qualifies for the pension (and death or disability), he/she will qualify for the entire amount of state contribution. The calculations shall be made on the basis of pension contract.
How is the amount which is deposited with respect to the state subsidy invested?
The state subsidy is regulated under the supervision of the Pension Monitoring Center. With respect to the paid contribution amounts, a separate state subsidy shall be defined in terms of the pension contracts and the amount which will be paid by the state shall be invested in this account. The state subsidy shall be kept in the Settlement and Custody Bank on behalf of the participant and it shall be invested in the pension mutual funds. However, the types of pension mutual funds in which the state subsidy will be deposited shall be determined by the Undersecretariat of Treasury.
Is it necessary to make a notification for the persons who have more than one contracts in the Private Pension System in order for them to benefit from the state contribution?
It is not necessary to make any notifications with respect to benefiting from the state subsidy in terms of more than one contracts of the participant.
Will the participants of the Private Pension System be able to receive state subsidy in the case where they have more than one contracts?
The amount which corresponds to 25% of the total amount of contributions made by the participants with respect to all their contracts shall be added as state subsidy in the manner which will not exceed 25% of the annual gross minimum wage.
Will the participants who wish to reenter the system upon exiting from the Private Pension System be able to benefit from the state subsidy as well?
The participants who are available in the system on 29 May 2012 and who terminate their pension contracts within two years as from 29 June 2012 will not be able to receive state subsidy in terms of the contribution amounts paid by them to the Private Pension System until 31 December 2014.
How is the tax deduction implemented in the new period of the Private Pension System?
The tax deduction is only implemented in terms of the yields.
|A Simple Calculation
The state provides to all private pension participants the additional contribution at the rate of 30% of the contribution amounts paid by them.
300 TL contribution amount for each month
Along with AgeSA, within the scope of the Private Pension System:
By virtue of your appreciating savings, OPPORTUNITY TO GENERATE
in your retirement period
The Private Pension System is under the
of the Undersecretariat of Treasury, Capital Markets Board and the Pension Monitoring Center
The Private Pension System supplements the public social security systems,IT IS BASED ON THE PRINCIPLE OF VOLUNTEERING
By virtue of the safe and secure structure of the AgeSA Private Pension, you can arrange your payments according to your preferences, you can easily execute your fund management and you will be able to retire without the requirement for cancelling the private pension. In the case where you stay in the system for at least 10 years and you complete the age of 56, the happy, comfortable and pleasant retirement years will be waiting for you.
There may be issues which disturb your mind, this is quite natural. In order to eliminate the questions which disturb your mind, you can take a quick look at the benefits of the Private Pension System and you can easily discover what the private pension is.
Along with you, your spouse who is not a taxpayer and your children who have completed the age of 18 can also benefit from the state subsidy on an individual basis. You can use the savings made by virtue of the PPS for the educations of your children or for different necessities in the future.
Your private pension accounts shall be maintained in the Settlement and Custody Bank and you will be able to monitor your fund shares from by means of these accounts on a daily basis.
At any time you wish, you can make interim payments at the amounts determined by you or you will be able to benefit from the state subsidy of the private pension by depositing the annual contribution amount in a certain month. Or on the contrary, you can suspend your payments in the necessary situations.
Our activities are supervised and monitored by the Undersecretariat of the Treasury, independent audit company and the Pension Monitoring Center and the activities of our funds and portfolio manager are supervised and monitored by the Capital Markets Board.
In our Private Pension plans, you can use the fund options which comprise different investment instruments. By virtue of this fund range, your savings continue to generate yields while they are protected from the market fluctuations. Pursuant to the market conditions, you can have your savings invested in various funds such as the liquid funds, foreign securities funds, Gold funds and Eurobond funds.
In our Investment Compass page,you can determine the funds which are appropriate for your profile and you can display the past performance of our funds
Since its establishment in 2003, the Private Pension System generated real yield at the rate of 3% above the annual inflation rate on average for its participants. The amount of 100 TL which was deposited in the system when the system was established in 2003, became 568 TL as of the end of 2018 in accordance with the plan yield which was generated on average within the Private Pension System. In the same period, the amount of 100 TL which was deposited in the inflation index became 378 TL as of the end of 2018. The system generated the added value of 189 TL for its participants only on the basis of the yields which were obtained by it. In addition to the added value which was created herein, the tax advantages and state subsidy which are provided to its participants by the system, upgrades the advantages of the system to a very significant level.
The Private Pension System is pension system which was established as a supplement of the current public social security systems in order for the individuals to live a more comfortably in their retirement periods, maintain the life standards which were ensured by them in the periods which they were able to generate income in their retirement periods as well and to comfortably cover the additional expenses which will be required by them.
With regard to the matters you wonder with respect to the Private Pension System legislation and implementations, you may examine our PPS Dictionary.
Along with the new PPS period which commenced on 1 January 2013, now the PPS is more advantageous. Because, the state provides to all private pension participants the additional contribution at the rate of 30% of the contribution amounts paid by them. For instance, you will be able to deposit the contribution amount of 200 TL to your account, you will be able to benefit from the state subsidy amount of 60 TL and therefore you will be able to make the saving at the amount of 250 TL.
The farmers, housewives, artisans, doctors, lawyers and everyone who has completed the age of 18 will be able to benefit from the state subsidy by participating in the Private Pension System. By making contracts for your children who have completed the age of 18 and your relatives, you can ensure that everyone in your family will benefit from the state subsidy on an individual basis.
You may watch the videos below with regard to the matters you wonder with respect to the Private Pension System.