New regulation for pension service borrowing

A proposal submitted to Parliament by the AKP increases the rate for service borrowing—such as military service, internships, strikes, and unpaid leave—from 32 percent to 45 percent. This development serves as both a critical opportunity for insured individuals looking to advance their retirement date and increase their pension, and a warning that costs will rise.

Cumhuriyet columnist Nergis Şimşek, in her article evaluating the new legislative proposal, stated the following:

"The changes made to Law No. 5510 on Social Insurance and General Health Insurance through the 'Draft Law on Amendments to Tax Laws and Certain Laws and Decree-Law No. 631,' dated 17/10/2025 and numbered 101, submitted to the Grand National Assembly of Turkey by the Justice and Development Party, have been evaluated on an article-by-article basis.

Articles 41 and 46 of Law No. 5510, along with provisional articles 31, 36, 43, and 44, regulate the legislation regarding service borrowing. With Article 18 of the draft law, the borrowing rate in the specified articles of Law No. 5510 has been changed; furthermore, with the paragraph added to the provisional Article 4 of the law via Article 23 of the draft, the borrowing rate has also been increased for borrowings made under Law No. 5434, and the effective date for the relevant articles has been set as 1/1/2026.

Under Law No. 3201, the borrowing rate for periods spent abroad was increased from 32 percent to 45 percent as of 1/8/2019. With this new draft law, the premium rate for borrowings—excluding birth leave—has been increased from 32 percent to 45 percent for periods including military service, legal internships, doctoral and specialty training, detention and custody, honorary assistantships, time spent in strikes and lockouts, periods of less than 30 days before 1/3/2011 for expert and master instructors, official student status abroad under Law No. 1416, part-time work, and periods of unpaid leave for 4/c insured personnel or resignations due to elections. The borrowing rates for civil servants wishing to make borrowings under Laws No. 5510 and 5434 are also being increased to 45 percent.

Furthermore, for insured individuals working under part-time employment contracts, the borrowing amount for periods related to general health insurance premiums, provided that these premiums have been paid for the incomplete months of part-time work, is being increased from 20 percent to 39 percent.

In this situation, it is expected that there will be a decrease in the number of people retiring early, as the borrowing costs for insured individuals who have service periods covered by borrowing and wish to retire by purchasing these periods will increase significantly. For employees who no longer have expectations of retiring, the probability of informal employment is rising, or at the very least, such a risk is emerging."