How does military service credit affect pension? Expert explains

As the end of the year approaches, calculations regarding increases for both pension payments and employee wages continue. Meanwhile, citizens are also following the process regarding their retirement rights.

Social Security writer and SGK Pension Legislation Branch Manager Nergis Şimşek explained 'how military service buy-back affects pension payments' in her article published in Cumhuriyet.

Şimşek wrote the following in summary regarding a message she received: "My insurance start date is 1/7/1996, and I performed my military service as 540 days between 09/05/1997 and 10/11/1998. I will apply for retirement this year to benefit from the 2024 advantage, but I cannot decide how much it will affect my pension if I buy back my military service and at what amount I should make the buy-back."

"In pension payment calculations, military service buy-backs for those who performed their military service after their insurance start date, like you, are attributed to the relevant years of military service as days and earnings, affecting both earnings and pension accrual rates.

Insured individuals can make buy-backs at any amount they wish, provided it is between the minimum and maximum earnings at the time of the buy-back application. When determining the buy-back amount, attention must be paid to the minimum/maximum earnings ratio in the years to which the buy-back will be attributed as earnings. If the ratio in the year the earnings will be created is lower than the ratio at the time of the buy-back request, it is more advantageous to make the buy-back according to the rate valid in the year the earnings will be created.

Because it will be possible to receive a higher pension by paying fewer premiums. The ratio between minimum and maximum earnings in 1997, when you performed your military service, is 1.717, and in 1998 it is 1.643. In 2024, the ratio between minimum and maximum is 7.5.

Even if you make a buy-back today at the highest earnings level, i.e., 7.5 times the daily minimum wage, while your buy-back is attributed as service to the relevant years, earnings will be created as at most 1.717 times the minimum wage in 1997 and 1.643 times the minimum wage in 1998, and these earnings will be taken into account in the pension calculation. Therefore, sometimes even if you make a buy-back at the minimum or maximum, the reflection on your pension may be the same.

Due to your military service being 230 days in 1997 and 310 days in 1998, and these being years that fall under the pre-2000 indicator determination, in the pension calculation performed; since the 540-day buy-back will first be added to the number of premium payment days, it will definitely increase your pension accrual rate. However, since the number of years falling under the pre-2000 indicator determination and the earnings amounts are important, sometimes there is no change in the indicator even if the military service buy-back is made above the minimum earnings.

Whether the buy-back is made at the minimum earnings (115.2144 TL) or at the maximum earnings amount of the relevant years (192,928.7 TL), the calculated pension amount is the same. Therefore, in this case, if you want to buy back your military service, it would be to your advantage to make the buy-back at the minimum earnings. If a buy-back is made, there is an increase of 1000 TL in the pension.