State contribution in the Private Pension System has decreased

A significant change has been made to the state contribution rate in the Private Pension System (BES), which is closely followed by many. The state support, which has been applied at 30 percent for years, has been reduced to 20 percent with the new regulation. This change forces savers to re-evaluate their current investments and retirement plans.

Within the scope of the regulation, the calculation method of the state contribution and the advantages it provides are also being reshaped. In calculations based on the gross minimum wage, it is observed that the decrease in the contribution rate negatively affects those investing at the annual upper limit. In the previous system, a participant who invested 396 thousand 360 TL annually received up to 118 thousand 908 TL in state contributions; according to the new rate, this figure now remains at 79 thousand 272 TL. In other words, there is a loss of 39 thousand 636 TL annually due to the change in state support.

Many participants are questioning whether leaving the BES is a suitable solution with the decrease in the contribution rate. However, experts point out that if one exits the system early, both the accumulated state contribution will be lost and high withholding tax may be paid. Therefore, it is emphasized that hasty decisions can lead to financial losses.

Experts state that it is important for those who continue to stay in the BES in the new period to focus on three main points while updating their plans. First, portfolio diversification plays a critical role. Since the state contribution rate has decreased, it is recommended to prefer stock, gold, or variable funds that carry higher return potential so that savings do not lose value.

In addition, for participants experiencing budget difficulties, reducing or freezing the contribution amount for a while instead of terminating the system completely is presented as an alternative way out. Since the BES is based on a long-term savings structure, even if the 20 percent contribution rate has decreased, it still continues to provide a significant advantage compared to other investment opportunities.

In short, after the state contribution reduction in the BES, it is of critical importance for both current participants and those considering entering the system to review their investment strategies. The main recommendations emphasized by experts are listed as re-evaluating fund distribution preferences, determining contribution amounts suitable for one's budget, and correctly analyzing the possible consequences of exiting the system.

News Source: 12punto