PENSIONS REVAMP: Changes to allow retirement at 55

MANAMA: Revamped pension laws that will make it possible for citizens to retire from the age of 55 under certain conditions have been urgently referred by the Cabinet to Parliament.

They aim to control a drainage in funds and introduce a set of new retirement rules in the country.

MPs are to be notified about the plans today at the beginning of the parliamentary session with the proposed new laws being referred, as a matter of urgency, to the services committee aided by the legal and legislative committee.

The current laws under the spotlight are the 1975 Civil Servants Pension Law and the 1975 Social Insurance Law, which now come under the Social Insurance Organisation (SIO).

In practice they set a mandatory retirement age of 60 with the pension received calculated on the salary payment received on the final working day, even if it had been suddenly increased in days preceding the end of employment.

The new changes would now be calculated on the average salary received over the last five years of employment. Also, people would be prevented from receiving multiple pension payments with only one post being used for the pension calculations.

Under the Social Insurance Law, private sector employees – even those in training, on trial or undergoing a test for a post – would have to be registered under the SIO.

Employers will have to pay 17 per cent and employees 7pc every month as a contribution to the fund from the wage calculation.

Under the new rules, if an employee has completed at least 20 years service, they will be able to retire at the age of 55, but would receive 30pc less of their full pension entitlement. Every year up to the age of 60 would see the amount they lose out reduced by 6pc.

Those who have completed at least 15 years of service by the time they reach 60 will receive full pensions. A panel will decide on individual payouts to those who have worked less than that.

New rules have been drawn up for civil servants too allowing them to have a choice of retiring at 55, with reduced benefits, or continue working until 60.

 

Source: http://www.gdnonline.com/Details/924085/PENSIONS-REVAMP-Changes-to-allow-retirement-at-55

 

Share this page Share on FacebookShare on TwitterShare on Linkedin
Close

Discover the 'Made in France à Bahrain' Guide

'Made in France à Bahrain' - Edition 2021
is YOUR guide to the economic presence in Bahrain. Click here to view the online guide