Turkish parliament approves private pensions law

August 11, 2016 1:51 AM EDT

Turkey's Prime Minister Binali Yildrim (front) makes his way to address members of parliament from his ruling AK Party (AKP) during a meeting at the Turkish parliament in Ankara, Turkey July 19, 2016. REUTERS/Umit Bektas

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ANKARA (Reuters) - Turkey's parliament approved on Wednesday evening a law requiring workers younger than 45 years old to be automatically registered with a private pension plan, a move aimed at boosting domestic savings.

"The Turkish Parliament has just approved a major reform. Auto-enrolment in private pension schemes is likely to boost domestic savings," Deputy Prime Minister Mehmet Simsek wrote on his Twitter account.

The contribution for employees would amount to around 3 percent of their annual income, according to the law.

Turkey's domestic savings rate was at 15.63 percent of the gross domestic product in 2015, according to the legislation.

The law will go into effect from the start of 2017.

(Reporting by Gulsen Solaker; Writing by Daren Butler; Editing by David Dolan)

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