The Law on Early Retirement
As per the Law Amending the Law numbered 5510 and the Decree Having the Force of Law numbered 375 and published in the Official Gazette on 3 March 2023 (“the Law on Early Retirement”), the conditions required for the retirement of the employees starting to work before 8 September 1999 have been redetermined offering a possibility for certain employees to retire earlier than previously foreseen.
How was the current pension regime under Turkish Law until the Law on Early Retirement?
The current pension regime is regulated as per the Social Security and General Health Insurance Law numbered 5510 and dated 31.05.2016 (“the Social Security Law). The Social Security Law introduced a new pension regime requiring higher pension ages and premium day requirements compared to the old Social Security Law numbered 506. The Social Security Law preserved the pension right of the employees who started working under the regime of the previous Social Security Law. Therefore, currently there are several regimes applicable to the employees for their pension rights depending on age, social security period and premium payments.
What is the new regime for retirement?
Under the scope of the Social Security Law fall employees starting to work on or before 8 September 1999, having the required insurance period and insurance payment days but not fulfilling the age requirement imposed by the current Social Security Laws. As per the relevant law, the employees having completed the insurance period of 20 or 25 years (20 for female and 25 for male employees) and paying a certain insurance premium (5000 to 5975 depending on the work start date) are entitled for pension irrespective of their age. Therefore, the age requirement applicable for employees to apply for pension has been eliminated for a certain group of employees starting to work on or before 8 September 1999.
Please note that the Law on Early Retirement grants a right to employees fulfilling the above-mentioned conditions to apply for a retirement. However, the employer might not initiate the procedure for retirement or not force the employee to apply for a pension under the new regime.
What is the procedure to follow-up under the new Law?
The employees fulfilling the requirements under the Law on Early Retirement might apply for a pension through the e-government portal (e-devlet). Upon filing the requested information, the pension application is then sent directly to the Social Security Institution which verifies if the conditions for pension are fulfilled.
As per Article 14 paragraph 5 of the Law numbered 1475, an employee fulfilling the requirements for the pension is entitled to severance pay. However, no notice pay is to be paid as per the provisions of the law and the jurisprudence of the Turkish Supreme Court.
The application procedure for pension as per the Law on Early Retirement might vary depending on the time of application. Therefore, the Social Security Institution should be contacted for up-to-date information.
Is it possible to re-join the company after the retirement?
The Employment Law numbered 4857 does not restrict the right to work upon pension. Therefore, the pensioned employees are also entitled to work in their previous or other workplaces. Also, employers are entitled to hire or not their pensioned employees.
If both parties are willing to continue the employment relationship after the pension of the employee, a new period of work commences, where the parties are deemed to execute a new employment agreement.
In summary, the Law on Early Retirement grants a right to employees fulfilling the required conditions for pension other than the age to apply for a pension. Since it is also possible to continue to work after the retirement for the same employer, it is accepted that many employees would apply for a pension under the new regime and continue to work for their current employers.
(11.05.2023)
Att. Derya ŞAHİNER
