More options to bolster pension funds outlined

A NUMBER of options to bolster Bahrain’s depleting pensions funds, without affecting the benefits, has been presented to MPs.

However, details of the alternatives, which were discussed during crunch talks between the government and legislators yesterday, were not revealed.

The government delegation was headed by Finance and National Economy Minister Shaikh Salman bin Khalifa Al Khalifa, who is also Social Insurance Organisation (SIO) chairman, and included representatives from the ministry and SIO.

The legislative delegation was led by National Assembly and Parliament Speaker Fouzia Zainal and included members from Shura Council and Parliament services committees.

“We can confirm that we have received multiple scenarios to prolong the life-span of the pension funds,” Parliament services committee chairman Ahmed Al Ansari told the GDN.

“However, things continue to be vague and we need a clear explanation of the direction and reasons; we are thinking of the fate of future pensioners.”

Another meeting has been set for Sunday.

The government earlier this month presented four new initiatives to push ahead with urgent government-sought reforms to pension funds.

They are:

* Pensions will not be lowered;

* The retirement age will remain at 60 years;

* Working between the ages of 60 to 65 will be optional and would see the maximum pension reach 90 per cent rather than the current 80pc; and

* Expatriate workers would be enrolled into the pension system and their end-of-service benefits will be paid by the SIO.

Ms Zainal said there was a commitment from both the legislative and executive authorities to ensure sustainability of the funds whilst also protecting the rights of pensioners and workers.

Shaikh Salman said co-operation was vital to ensure sustainability of the funds.

The government last year presented six reforms after projections showed the public pension fund would go bankrupt in 2024 and the private pension fund by 2033.

The six proposals were:

* Reducing wages by 6pc for every worked year before determining a pension through a detailed calculation;

* Setting the retirement age at 60 and voluntarily up to 65, although it would be possible to allow work beyond these years;

* Calculating the pension on an average of the last five worked years;

* Increasing monthly contributions gradually by 1pc from 2020 to reach 2.7pc;

* Setting a minimum retirement age at 50; and

* Cancelling ‘giveaway’ years.

Source: https://www.gdnonline.com/Details/1034144/More-options-to-bolster-pension-funds-outlined