Millions of retirees are anxiously waiting to find out what their minimum pension will be. Economist Muhammed Bayram answers frequently asked questions. Here are the details…
The new retiree salary hike has reached its final turning point. The Turkish Statistical Institute will release June inflation statistics on July 3, thus determining the inflation gap for the first six months of the year.
Especially during the salary increase period, retirees experience some confusion regarding the base salary and minimum pension. So what is the base salary and how is it different from the minimum pension? Will there be a revision of the base salary? What is the expected amount of the minimum pension?
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In response to a question on the matter to milliyet.com.tr, chartered accountant and economist Muhammet Bayram explained: “Discussions on basic salaries have started to take place in recent years. This increase caused confusion as it was made to the basic salary and had a major impact on salaries.
Because the government calculates wages based on insurance premiums paid, if you pay low premiums, your wages are likely to be at the lowest pension level.
That’s why those with the lowest pensions started saying that the proportional increase doesn’t work for them. Retirees can find out their basic salary. They can log in via e-government and find out their actual salary through the insurance system. Basic salary is the main premium pay. Proportional increases are made according to the premium basic salary. If there is a 25% increase at the end of the year, it will be based on the premium-based earnings.
How does base salary differ from minimum severance pay?
Considering that your root salary is 8,000 TL and the estimated 6-month inflation difference is 25%, if your minimum pension of 10,000 TL does not increase at all, you will not be able to benefit from the proportional increase, since your salary will be completed at 10,000 TL.
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25% of 8,000 TL is 2,000 TL. Add this to 10,000 TL. If your minimum pension increases to 15,000 TL and your basic salary is 8,000 TL, your salary will increase to 10,000 TL. However, the state will supplement your salary up to 15,000 TL.
Are there any restrictions on base wages?
In reality, adjustments to the basic salary are expected for each period. There is a debate about the minimum pension and the basic salary. To stop this, if the minimum pension is fixed at the basic salary, the gap with the minimum wage will be filled, and such a debate will no longer take place.
Expectations for minimum retirement benefits change
My estimate is that the minimum pension will be around 15,000 TL, an increase of 50%, although the proportional increase will be around 25%.
Is the root salary the same as the minimum salary?
This needs to be done. Salary increases are being considered in line with the targeted inflation rate. If based on targeted inflation, this will anchor inflation expectations. If people know what salary they will receive, they will not buy tomorrow’s necessities today. But inflation will not rise any further.”
