Turkey’s pension system is ranked 49th overall out of 52 countries and came in last in the sustainability category of the Mercer CFA Institute Global Pension Index 2025, Bloomberg HT reported.
The index assessing national retirement systems based on adequacy, sustainability and integrity ranked Turkey in the lowest D-category, indicating that its system “has major weaknesses that need to be addressed, without which its efficacy and sustainability are in doubt.”
The report recommended several reforms, including raising the minimum public pension provided to the poorest elderly, expanding participation in occupational pension schemes to increase contributions, requiring that part of retirement benefits be paid as a regular monthly income rather than a lump sum and reducing pre-retirement withdrawals from private pension funds.
The problems in the country’s pension system also sparked a debate during a parliamentary session reviewing the Labor and Social Security Ministry’s budget on Tuesday.
While top-performing “A category” countries — the Netherlands, Iceland, Denmark and Israel — maintained their positions, Singapore joined the group for the first time. Mercer and CFA Institute officials noted that as global uncertainty grows, life expectancy increases and labor markets evolve, governments face mounting pressure to adapt their pension systems and safeguard retirement incomes.
Serap Özalp, the principal for retirement and benefits at Mercer, said Turkey must enhance transparency, strengthen governance structures and encourage cooperation between public and private pension providers to build a sustainable system.
Although the government declared 2024 the “Year of Retirees” and announced a new “Complementary Pension System” (TES) as part of its 2026–2028 Medium-Term Program to address existing challenges, no detailed framework or timeline has been released.
Initially planned for late 2025, now postponed to the last quarter of 2026, the scheme aims to create a second-tier pension system based on automatic enrollment, combining employee, employer and state contributions.
During Tuesday’s session, opposition lawmakers criticized the government for failing to stabilize the pension fund’s finances. They argued that in an environment where pensions continue to fall behind the minimum wage and many retirees are forced to work second or third jobs, the government is again shifting the burden onto workers through an unclear system.
They noted that while the average pension in 2003 was 36 percent higher than the minimum wage, it now stands at 22 percent below it.
A 2023 retirement law adopted ahead of the presidential election that allows people insured before September 9, 1999, to retire regardless of age also was discussed during the session. Lawmakers, emphasizing the principle of equality, renewed calls for a new regulation enabling gradual retirement for those insured after that date who would otherwise need to work up to 17 additional years.
The Mercer CFA Institute Global Pension Index has been published for 17 years by Mercer, a New York-based consulting firm, in collaboration with the CFA Institute, a non-profit professional organization providing finance education to investment professionals.
