Turkey’s New Pension System Begins in April: What the 3pct Pay Cut Means for Workers

A new chapter is opening in Turkey’s working life as of April, marking one of the most significant shifts in the country’s social security architecture in recent years. The Supplementary Pension System (TES) is set to become mandatory for all employees, introducing an additional, automatic layer of retirement savings on top of the existing system. While policymakers frame the reform as a long-term safeguard for retirement income, its immediate impact will be felt directly in workers’ payslips.

Under the new model, employees will see a 3% deduction from their gross salaries, which will be redirected to a dedicated pension fund. For minimum wage earners alone, this translates into TRY 11,890 per year flowing directly into the system. As the implementation date approaches, the details of TES—and its potential integration with severance pay—are becoming a central topic in labor and social policy debates.

A Mandatory Layer Added to the Pension System

The Supplementary Pension System has been designed as a supporting pillar rather than a replacement for Turkey’s existing public pension scheme. However, what clearly distinguishes TES from previous models is its mandatory nature. Unlike the Individual Pension System (BES), which operates on a voluntary basis, TES will automatically enroll all employees starting in April.

According to labor expert Hüseyin İrfan Fırat, who shared details on BirGün TV, this element of compulsion is the defining feature of the new framework. Once the system comes into force, opting out will not be an option. Every employee, regardless of sector or income level, will become a participant by default.

From a policy perspective, the aim is to expand long-term savings, reduce pressure on the public pension system, and create a more sustainable retirement structure. For employees, however, the most immediate change will be a reduction in take-home pay.

How the 3% Salary Deduction Will Work

With the launch of TES, a new deduction line will appear on payrolls. In addition to existing Social Security (SGK) premiums and income tax, employees will contribute an extra 3% of their gross salary to the supplementary pension fund.

This contribution is calculated directly from gross wages, meaning its impact grows as salaries increase. While the system is promoted as a long-term investment in financial security, it represents a short-term cost for workers already navigating high living expenses.

The collected funds will be pooled into professionally managed accounts, intended to grow over time and provide additional income during retirement. Supporters argue that early and consistent contributions will significantly enhance retirement outcomes. Critics, however, point to the absence of individual choice and the immediate erosion of net income.

Minimum Wage Earners: The Financial Impact in Numbers

The scale of the deductions becomes clearer when translated into annual figures. Based on current minimum wage calculations shared by Hüseyin İrfan Fırat:

Each minimum wage worker will contribute at least TRY 11,890 per year to the TES fund.

This amount represents the baseline contribution, meaning higher-income employees will see proportionally larger sums diverted into the system.

While the funds are technically savings rather than taxes, the distinction may feel blurred for workers whose monthly budgets are already stretched. The debate centers on whether the promise of future security justifies the immediate financial pressure.

Severance Pay and TES: A Critical Intersection

One of the most sensitive and closely watched aspects of the reform involves severance pay (kıdem tazminatı). Plans are underway to integrate the existing severance pay structure into the Supplementary Pension System, a move that could fundamentally reshape employer-employee relations.

Under the proposed model:

The severance pay fund would become a component of TES.

The traditional lump-sum payment received upon leaving a job could be redirected into the supplementary pension framework.

Rules governing when and how workers can access these funds—either at job termination or during retirement—are expected to be clarified in April.

This potential merger has raised concerns among labor groups, who fear it could weaken workers’ bargaining power or delay access to compensation they currently receive upon dismissal. Supporters, on the other hand, argue that integrating severance pay into a long-term savings model could provide greater financial stability over a lifetime.

What the System Aims to Achieve

Officials and experts presenting TES emphasize that it is not an alternative to public pensions, but rather a complementary mechanism designed to strengthen retirement income. By mandating participation, the system seeks to ensure broad coverage and sufficient fund accumulation over time.

The first tangible impact of TES will appear on April payrolls, when employees see the new deduction reflected in their net wages. Beyond that, the system’s long-term success will depend on fund performance, regulatory transparency, and the ultimate structure of the integration with severance pay.