Türkiye’s long-term social security and retirement architecture is preparing for one of its most significant transformations in recent years. The 2026 Presidential Annual Program—officially announced in the Official Gazette No. 33062 (first duplicate issue) on October 30, 2025—sets the stage for a broad reconfiguration of pension mechanisms, especially through the anticipated Complementary Pension System (TES).
Prepared jointly by the Ministry of Treasury and Finance and the Presidency of Strategy and Budget, the program serves as the government’s roadmap for the upcoming year. It outlines not only macroeconomic and fiscal strategies but also sector-specific goals, performance metrics, and implementation principles. Within this broad strategic framework, reforms targeting retirement savings—particularly the evolution of the Automatic Enrollment System (OKS) and the introduction of TES—represent a major policy priority.
The new system is expected to reshape employer–employee financial relations, influence workforce planning, and establish a more sustainable pension environment for future generations.
Key Objectives Introduced in the 2026 Program
1. Transition Toward a New Structure: Birth of the TES
The program explicitly states that the current Automatic Enrollment System will eventually evolve into a second-pillar pension system incorporating employer contributions. This marks a fundamental shift from OKS, which largely functions through employee participation alone.
TES is envisioned as a structured, mandatory system designed to complement existing social security benefits and enhance retirement savings through shared financial contributions.
2. Greater Fund Variety and Diversified Investment Options
Another major target involves improving the investment structure within OKS. The program emphasizes expanding fund categories to better reflect participants’ varying risk tolerances, time horizons, and financial expectations.
Diversified fund choices are expected to:
- Support long-term portfolio performance
- Offer improved risk management
- Encourage higher levels of participant engagement
- Contribute to retirement adequacy
Although the legal infrastructure of OKS remains in force today, no binding regulation has yet been published regarding TES. Nevertheless, the Presidential Program makes clear that the transition is not speculative—it is a planned evolution.
**What Is Known So Far About the TES?
(Information Shared with the Public)**
Even though legislative details have not yet been finalized, several structural principles have already surfaced through official statements, policy papers, and technical briefings shared with the public.
Below is a consolidated summary of what the TES is expected to include.
1. Broad Scope Covering All Employees
Unlike many voluntary pension models, TES aims to encompass all salaried employees regardless of sector, industry, or contract type. The intention is to build a large, sustainable second-pillar pension base capable of supporting long-term national savings.
Those expected to fall outside the system include:
- Retirees
- Employers themselves
- Company shareholders and partners
Thus, TES specifically targets the active workforce.
2. Mandatory Participation
TES marks a major departure from the previous OKS structure. While OKS allowed employees to opt out, TES will not offer voluntary withdrawal. Once an employee is included, they remain in the system except under legally defined circumstances, such as:
- Reaching retirement age
- Suffering a disability that prevents work
- Death (in which case beneficiaries receive benefits)
- Completion of a minimum contribution period
This shift reflects the system’s long-term policy objective: to build reliable retirement savings without interruptions caused by voluntary exits.
3. Multi-Contributor Financial Structure
TES is designed as a co-funded pension mechanism combining contributions from:
- Employees
- Employers
- The State
Although exact rates have not been officially enacted, figures publicly disclosed indicate the following framework:
- 3% of the employee’s gross monthly salary
- 1% employer contribution (new financial obligation for businesses)
- State contribution equal to 30% of accumulated contributions
If implemented as announced, this financial structure would create significant long-term savings growth, particularly for employees with stable, multi-year employment timelines.
4. Planned Launch Timeline
According to the 2026 Presidential Program, the Complementary Pension System is expected to begin implementation in the second quarter of 2026. Preparatory work across ministries, regulatory bodies, public pension institutions, and private pension companies is already underway.
Deep-Dive Analysis: Why TES Represents a Major Policy Shift
1. A New Layer in Retirement Security
Turkey, like many countries, faces demographic challenges including rising life expectancy and shifting worker-to-retiree ratios. Public PAYG (pay-as-you-go) pension systems worldwide are under increasing pressure. Introducing a second mandatory pillar aims to:
- Strengthen long-term financial sustainability
- Increase private retirement savings
- Reduce dependency on state-funded pensions
- Encourage institutional investment
2. Enhancing National Savings and Capital Markets
TES is not only a social policy; it is also a capital market strategy. A broader mandatory pension fund pool could channel long-term investments into:
- Infrastructure
- Technology and innovation
- Corporate growth
- Strategic national sectors
Large, stable pension funds have historically played key roles in driving investment-led economic development around the world.
3. Employer Impact: Costs vs. Strategic Gains
For employers, the system introduces new financial responsibilities—specifically the expected 1% contribution. While this may increase payroll-related expenses, TES may also generate several indirect advantages:
- Greater employee loyalty
- Stronger retention rates in competitive sectors
- Reduced turnover and recruitment costs
- Improved employer branding
- A more financially secure and stable workforce
Expected Administrative and Operational Requirements for Employers
As TES becomes mandatory, businesses will need to update internal systems and processes. Key areas include:
1. Payroll System Adjustments
Companies must ensure payroll software can automatically calculate:
- Employee contributions
- Employer contributions
- Deductions and reporting
- Periodic transfers to pension providers
2. HR and Benefits Integration
HR teams will need to:
- Communicate TES procedures to employees
- Manage opt-out exceptions (if any emerge)
- Coordinate with pension companies
- Monitor long-term participation requirements
3. Compliance and Auditing
TES obligations are expected to become part of employers’ broader compliance landscape. Businesses may face:
- Reporting obligations
- Potential audits
- Legal liabilities in case of non-compliance
Preparing early will reduce operational risks.
Employee Perspective: Long-Term Advantages
For workers, TES has the potential to:
- Significantly boost retirement savings
- Provide an additional safety net beyond public pensions
- Allow benefits to grow through long-term investment returns
- Build financial stability early in their careers
- Encourage financial literacy and planning habits
If managed well, TES could become one of the most impactful personal finance tools available to the Turkish workforce.
Challenges and Questions Still Awaiting Clarification
While the general outline of TES is becoming visible, several aspects remain unclear:
- Will employees have fund-selection flexibility?
- How will vesting periods be structured?
- What happens when employees change employers?
- Will early partial withdrawals ever be permitted?
- How will the state’s 30% contribution be financed and governed?
These points will be clarified through secondary legislation in the coming months.
Conclusion: Preparing for a New Era in Retirement Systems
The Complementary Pension System (TES) is poised to reshape Turkey’s pension ecosystem materially. As a mandatory, multi-contributor, long-term savings mechanism, TES promises to offer employees greater retirement security while encouraging broader economic growth through increased pension fund accumulation.
Although employers will face new cost burdens, the expected benefits—stronger retention, improved workforce stability, and enhanced employee well-being—may outweigh the financial impact over time.
With the system expected to launch in Q2 2026, it is crucial for employers to begin preparations now. Adjusting payroll systems, updating HR procedures, and planning administrative workflows will ensure a smooth transition once the legal framework is enacted.
