Retirement 'frenzy' in Turkey: Hits historic peak, number of retirees exceeds number of workers in 6 provinces

Although the number of insured workers in Turkey continues to rise, the active/passive ratio is declining. Compared to the beginning of the year, a deterioration in the active/passive ratio was observed in 58 provinces. The active/passive balance is measured according to the "number of files" of people receiving monthly pensions and income.

Since more than one person, such as a spouse or child, can receive a pension through the same file, two separate sets of data are released. In terms of statistics based on SGK data over the years, the active/passive balance declined to 1.63 as of June. At the beginning of the year, this ratio was 1.6. Beyond the number of files, a similar picture emerges when looking at the number of individuals. At the end of 2023, there were 1.58 workers for every 1 person receiving a pension or income. By the end of June, this ratio had fallen to 1.55.

According to a report by Mehmet Kaya from Ekonomim, when looking at the years, despite a partial 2-year decline between 2009-2017, an improvement in the active/passive ratio was observed in SGK data, and in 2022, a level of 2.1 workers per 1 retiree was reached. In 2023 and 2024, the number of retirees increased more rapidly due to the EYT regulation, and the balance fell back to 1.63. Compared to the pre-EYT period, a 0.5-point drop in the active/passive balance has been reached.

'TEMPORARY IMPROVEMENT' IN PENSION CALCULATION RATES

On the other hand, the fact that those retiring this year will be connected to a higher monthly pension compared to those retiring in 2025 due to high inflation has also caused a large number of people to rush to retire. Although messages have come from the government side that a temporary improvement could be made in pension calculation rates, no commitment-level promise has been made yet. The ratio of those receiving pension payments to the number of working people is one of the important indicators for the future health of the social security system. In general, being above 2 workers for every 1 retiree indicates low risk.

The future perspective is based on the population's age pyramid. Recently, a stagnation has begun in the ratio of the young population in Turkey. From the 2030s onwards, the young population advantage will disappear. Although experts state that the problem could be solved by advancing the retirement age, the fact that the advantage of working for a long time was eliminated with the regulation made in 2008 is a factor in employees wanting to retire immediately.

One of the indicators that the deterioration in the active/passive balance may increase in the coming period is that when looking at it on a provincial basis, this balance has deteriorated in 58 provinces since the beginning of the year. It is observed that the deterioration continues, albeit at a low level, especially in provinces where employment is concentrated.

RATIO STABLE IN 3 PROVINCES, IMPROVEMENT IN 20 PROVINCES

According to figures compiled from SGK data, a deterioration between 0.01 points and 0.28 points in the active/passive ratio was observed in 58 provinces in Turkey on a file basis, including provinces with high industrial density and high population such as Istanbul, Ankara, Izmir, Kocaeli, Gaziantep, Adana, Sakarya, and Bursa. While the ratio remained stable in three provinces, there was an improvement in 20 provinces.

The provinces with improvement were concentrated in tourism-intensive Aydın, Antalya, and Muğla, as well as provinces in the recovery phase due to the earthquake such as Kahramanmaraş, Adıyaman, Malatya, and Hatay. Apart from these, there was improvement in provinces such as Edirne, Rize, and Trabzon. The improvement in the active/passive ratio ranged from 0.01 points to 0.31 points, which is the improvement score of Antalya, which had a good period in tourism.

As of June 2024, it was seen that the number of people receiving a pension or income in 6 provinces in Turkey was higher than the number of working people. These provinces were listed as Balıkesir, Çorum, Giresun, Sinop, Zonguldak, and Bartın. The number of people receiving a pension is higher than the number of files because it includes those who are entitled to receive a pension or income from a single file, such as a mother and daughter.