Complementary Pension System will arrive in 2024

The three-year Medium Term Program (MTP) has been announced, covering the period 2024-2026, which includes economic objectives and policies.

According to information from the plan, the Complementary Pension System (TES) will be established, in which the Automatic Enrollment System (OKS) will become a second level pension system with contributions from employers. The legal regulation on the subject is scheduled for the fourth quarter of 2024.

In 2017, the automatic affiliation system began, which allows employees of the Individual Pension System (BES) to be included in the BES by their employers. Consequently, 3 percent is deducted from the salary of all employees and transferred to the BES. If the employee wishes, he can remain in the system and save; If he doesn’t want to, he leaves the system.

The TES was designed as a system that aims to compensate for the loss of income during retirement, protect living standards during the working period, generate additional income for retirement, and increase household savings.

The TES was planned as a secondary level pension system by the employee, the employer and the government, where the cash contributions to the individual account of the employee will be invested in mutual pension funds and the selection of these funds and the distribution of the savings between the funds will be made by the employee.

WHAT WILL BE THE GREATEST COMPENSATION?

According to previous studies of the system on the subject to the public, All employees within the scope will be included in the mixed TES, and then whoever wishes can switch to optional TES.

With the entry into force of the law, the rights of all employees subject to severance pay for the past period will be protected in the same way. Guaranteeing the rights of the worker with respect to the indemnities corresponding to the periods of work prior to this date, the transition to the mixed TES will be carried out. The employee who left the job in a way that warrants compensation will be able to receive the previous compensation, and there will be no transfer to the new system.

The worker, who receives 8.33 percent of his gross salary as compensation in the layoff system, will be entitled to a total of 8.33 percent, with 5.33 percent compensation and 3 percent employer contribution in mixed TES. The 3 percent employer contribution will be charged to the individual fund account.

In the current situation, when the employee resigns, his entire 8.33 percent seniority entitlement will be burned, while his 3 percent entitlement in the individual fund account will be reserved in the mixed TES. There will be no loss of rights since the right of workers to receive compensation before their transfer to mixed TES will be reserved.

The amount accumulated in the individual fund account within the scope of the optional TES will also be granted under the conditions that the worker leaves the job by himself, with some exceptions, in all cases and under the condition that he has worked in the same workplace for more than 1 year.

WHAT WILL HAPPEN IN THE JOB CHANGE?

If the employee is fired or resigns for any reason other than justified dismissal, the amount accumulated in the last company for which he worked will be kept in the individual fund account.

If the work period is greater than one year, 50 percent of the employer and state contribution accumulated in the fund is protected in the individual fund account, while 50 percent is protected in the TES insurance account, for the period of work of the employee in the last company of the dismissed worker in cases in which the norms of morality and good will of the work or service contract are not respected. This amount, if any, will remain blocked in the employee’s account until the legal process is complete.

The employer contribution and the state contribution of the worker whose work or service contract is terminated in less than a year or who resigns due to resignation, will be transferred to the TES insurance account and this amount, if applicable, will remain blocked. on the worker’s account. account until the end of the legal process.

WHAT WILL THE CONTRIBUTION RATE BE LIKE?

While in the mixed TES, 5.33 percent of the seniority right and 3 percent of the employer contribution are received, in the optional TES, in addition to the 4 percent of the employer contribution, 1 percent will be applied (based on the minimum premium income) of state contribution.

The employee contribution to the system is 0.5 percent for employees whose monthly earnings are based on the minimum wage, 1.5 percent for employees whose monthly earnings are up to twice the minimum wage with the minimum wage and whose monthly income is more than twice the minimum wage. .determined as 2.5 percent for employees. If requested by the employee, the employee’s contribution can be increased up to 6 percent of the monthly income based on the contribution.

HOW WILL THE MONEY BE VALUED?

Payments of state contributions to individual accounts will be made in cash. Payment will be made until the end of the month following the month in which the contributions of the worker and the employer and the worker are transferred to the system.

The savings will be used through mutual pension funds. The employee will make the selection of funds himself, and the actual income will be formed accordingly.

Pension companies must insure their receivable premiums. In addition, the amounts transferred to the TES insurance account of employees who have been fired or resigned from their workplace for less than 1 year due to situations that do not comply with the rules of morality and goodwill will also be allocated to insurance. and similar reasons. purposes.

WHAT WILL HAPPEN IF REQUESTED?

If the worker quits his job for less than a year, only the employee’s contribution will remain in the individual fund account. In the event of resignation from employment for more than one year, the premiums paid to the individual fund account will continue to be included in the account without any loss and will continue to benefit from the funds. The employee may receive it at the age of partial exit or retirement, depending on the conditions of exit from the system.

DEPARTURE CONDITIONS

If requested, 10 percent of the amount saved in the private pension account on the date of application and multiple benefits for each of the reasons such as one-time marriage, one-time unemployment, first-time home purchase, and serious illness. partial withdrawal, a full payment may be made in any case, not to exceed 20 percent of the partial withdrawal rate.

The total exit from this system, which does not have the right to withdraw or leave, will occur in the event of death or disability of the employee when the retirement period ends. When the employee retires, they will be logged out of the system at the end of the monthly period to be connected to it.

NO BULK PAYMENT

Even if the employee has worked one day, his right to the individual fund account will be reserved. If he is fired by the employer, your TES contribution will remain in his account in exchange for a day’s work.

When the person retires, they may receive a single payment of up to 25 percent of the amount accumulated in their account. The remaining amount in the individual fund account will be paid monthly.

SSI PENSION

The TES was designed as a secondary level pension system. Therefore, the first pillar at the level of the Social Security Institution (SGK) differs from the pension system. When the employee reaches retirement age, he will retire from the SGK and at the age of 60 he will receive his second pension in the form of TES. The person may receive both pensions at the same time without any deduction or proportional reduction.

The supplementary retirement age is set at 60 years, but there is no time limit for retirement. Since contributions paid on behalf of the employee are included in the individual fund account, each employee will be entitled to the savings in their account when they reach retirement age. That is, those who have worked for 5 years or those who have worked for 30 years will receive their payment within the scope of the savings in their individual fund account when they reach age 60.