The Law on the Amendment of the Social Insurance and General Health Insurance Law and the Decree Law Act No. 375, Law Act No. 7438 (“Law”) (also known as the Regulation for Those Ineligible to Retire due to Age), was published on 3 March 2023 in the Official Gazette with number 32121 and entered into force on the date of its publication.   

What does the Law change?

Following the effective date of the applicable bill of legislation, insured persons not previously eligible for retirement due to their age would be allowed to retire provided if they satisfy conditions other than age.

In Turkey, there are basically three (3) fundamental conditions that have to be met to be eligible for retirement: age, number of premium payment days, and insurance period. Under the Law, which entered into force on 3 March 2023, the following persons will be entitled to retirement without any age requirement:

• Individuals who started working before 8 September 1999 (inclusive) within the scope of long-term insurance branches (disability, old age, and death insurance)
• Individuals who started working after 9 September 1999 (inclusive) within the scope of long-term insurance branches, but whose insurance starting date was brought back to a date before 8 September 1999 (inclusive) with the service debt they incurred in accordance with the provisions of the legislation allowing this.

Persons who will exercise their right to retire under the Law have the right to terminate their employment contracts immediately, and as a result will be entitled to severance pay if they have worked for at least one (1) year.

What is included in the Law?

According to the Law, the following conditions need to be met to apply for retirement:

• The insurance starting date: Those who started working as insured persons before 8 September 1999 (inclusive) and those who started working as insured persons after 9 September 1999 (inclusive) and with the service debt they incurred in accordance with the provisions of the relevant legislation allowing them to bring back the insurance starting date to a date prior to 8 September 1999 (inclusive).
• The insurance period and/or the number of premium payment days: (a) For persons insured under the Social Insurance Institution (“SSI”), they are required to complete the insurance period of 20 years (for women) and 25 years (for men) and between 5000 and 5975 premium days, which varies depending on the insurance starting period. (b) For persons insured under Social Security Organization for Artisans and the Self-Employed (“Bağkur”) and Retirement Fund ("Emekli Sandığı”), 7200 premium days (for women) and 9000 premium days (for men).

The following additional requirements were added by the Law:

• When an employee retires in accordance with the Law and returns to their previous private sector job within thirty (30) days of their resignation, the Treasury will pay the sum equal to five (5) points of the employer's social security support premium at the time of employment.
• If the insured person who benefits from the social security support premium employer’s share discount quits their job, this discount will not be available again.
• For employees hired in public institutions and organizations, special provincial administrations and municipalities and their subsidiaries, and local government unions of which they are members, and those who have been transferred to employee status together or separately in companies with more than half of the capital belonging to special provincial administrations, municipalities and their affiliates who are entitled to a retirement pension, old-age or invalidity pension, the regulations requiring the termination of their employment contracts by the public institutions and organizations or companies in which they are employed are repealed.    

What requirements and steps should be observed by the employer for employees who will benefit from the Law?

For an employee to retire within the scope of the Law, he or she must submit a letter of resignation to the employer together with a letter obtained from the e-government ("e-devlet") application regarding eligibility for statutory seniority compensation, and preferably a letter stating that he or she has applied to the SSI for old age pension payments. However, if there is any doubt about the employee’s entitlement to retirement, the employer can also require the employee to submit an official letter obtained from the SSI stating that he or she is entitled to retirement.

The employer must notify the SSI within no later than ten days from termination of the employment agreement. In this case, the employer must make the SSI notification regarding the termination of the employment with the code “08 – Due to retirement (old age) or lump sum payment”.

What are the employer’s payment obligations for employees who will retire and terminate their employment within the scope of the Law?

The Law does not stipulate any specific provision in relation to the employer’s current payment obligations for employee receivables and compensation under Labor Code No. 4857 and the relevant legislation. The standard procedure for what the employer is required to pay an employee terminating their employment relationship due to retirement will still be followed in this situation. As a result, the following are the employer's payment obligations for employee receivables and compensation owed to the retiring employee:

• Statutory seniority compensation
• Accrued and unpaid salary
• Accrued contractual benefits (e.g., premiums, bonuses, commissions, etc.)
• Accrued and unused annual leave pay
• Accrued and unpaid overtime/exceeding time pay
• Accrued and unpaid pay for work on national and public holidays and weekly holidays

All of the employee's rights must be paid in full upon termination of the employment agreement. As a result, the employee must be paid for all receivables by the time they retire. However, the relevant receivables may be paid in instalments if a mutual agreement for this exists between the employer and the employee.

Does the employer have an obligation to rehire employees having retired within the scope of the Law?

There is no provision stipulated in the Law other than the above-mentioned five (5) points discount regulation for those who retire and want to work for their former employer again. Therefore, general labor law principles will apply in this regard. If a request is made by the employee to continue working after retirement, the employer has the right to freely evaluate this request.

Overall, whether or not an employee benefiting from the Law is rehired will depend on the mutual agreement of the parties. The employer may rehire the employee taking into account their needs and the employee’s position, knowledge, and qualifications. Thus, the employer is not obliged to rehire the retired employees.

Does a period need to elapse before an employee having retired within the scope of the Law is rehired?

There is no requirement for a particular amount of time to pass before rehiring employees having retired under the terms of the Law. The employer may rehire retired employees the day after the employment was terminated, but may also rehire them at a later date.

Details of the Law can be found via this link (only available in Turkish).