The Regulation on Partial Payment in the Individual Pension System (“Regulation“) issued by the Insurance and Individual Pension Regulatory and Supervisory Authority (“SEDDK“) was published in the Official Gazette on 26 September 2023.
The Regulation stipulates the application of participants (“participants“) in the individual pension system (“IPS“) to exercise their right to partial payment, the evaluation phase of the application and the cases where partial payment can be received, the calculation and payment of the state contribution share to be paid with partial payment and the sanctions to be applied, the duties and responsibilities of the pension supervision centre and pension companies in the partial payment process and other issues related to partial payment.
According to the Regulation, participants who meet certain conditions may be entitled to receive partial payment of up to fifty per cent of their savings under the specified conditions and circumstances, provided that they submit the documents stipulated under the Regulation for marriage, housing purchase, education or natural disasters.
In order to exercise the right to partial payment, participants must not have exercised their right to partial payment until at least five years ago and must have paid at least five times the monthly gross minimum contribution amount valid as of the application date.
Except for the cases of retirement, death, or disability; the Participants can exercise the partial payment right, starting from the date of partial payment, for a period of four years for educational purposes, provided that they commit not to terminate the BES contract subject to partial payment through the exit process, and for other cases, this period will be three years.
Participants will not be able to make partial payment application for employer group pension contracts, contracts subject to a lien or pledge, or contracts subject to a transfer of receivables contract in force.
Marriage or Housing Purchase
According to the Regulation, participants who benefit from the right to partial payment for marriage; will be required to submit a copy of the extract of civil registry taken from the e-Devlet showing that they have been married within two months before the application date or within two months from the date of partial payment to the pension company in which they have participated in the individual pension system.
Participants who benefit from the right to partial payment for the purchase of housing, will be required to submit a copy of the title deed document showing at least fifty per cent ownership of the house purchased within two months before the application date or within two months from the date of partial payment to the pension company in which they have participated in the individual pension system.
In partial payment applications to be made in case of education it is regulated that participants may apply for partial payment if they are enrolled in any formal education undergraduate programme of universities in Turkey, provided that they are not over the age of twenty-one on the application date. It is obligatory to submit the student certificate to be obtained through E-devlet to the pension company participating in the individual pension system.
The participant who will apply for partial payment due to education is also entitled to benefit from the right to partial payment by purchasing an annuity product with monthly, quarterly or annual payments and a four-year term. These annuity offers will be prepared by insurance or pension companies in line with the participant’s expectations, age, the amount of partial payment to be received and similar features and will be offered to the participant’s preference through the pension monitoring centre.
The Regulation stipulates that participants who have suffered losses in regions where disasters affecting general life have been declared may apply for partial payment within six months following the date of the natural disaster.
Within the scope of the relevant article, it is regulated that the right to partial payment can be exercised on a participant basis for one time only and limited to fifty per cent of the last calculated accumulation amount before the date of the natural disaster.
It is stated in the Regulation that the document to be submitted by the participants who will benefit from the right to partial payment due to a natural disaster will be announced by SEDDK.
In addition, for partial payment applications to be made due to natural disasters, the conditions stipulated in the Regulation of not having exercised the right to partial payment until at least five years ago and having paid at least five times the monthly gross minimum wage amount valid as of the application date will not be applied.
State Contribution Share
The Regulation also stipulates that the state contribution payment of the participant who receives a partial payment shall be limited to the amount in the state contribution account of the relevant IPS contract at the rate of 20 per cent of the amount subject to partial payment in requests made due to housing purchase or marriage, and 25 per cent of the amount subject to partial payment in requests made due to education and natural disasters.
The Regulation will be effective upon 6 (six) months after its publication date on the Official Gazette.
You can access the full text of the Regulation from the link below.