Plan to include expat workers in pension fund

Expatriates working in the public and private sectors could be incorporated in the pension fund, it is learnt.

The Social Insurance Organisation (SIO) said the government is considering the move.

Parliament’s services committee, chaired by Ahmed Al Ansari, had submitted a proposal suggesting the inclusion of expatriates in the pension fund.

Responding to the committee, SIO said the inclusion of expatriates under the military pension law would enable the fund to generate up to BD200 million annually, said a report in our sister paper Akhbar Al Khaleej.

In a statement to Akhbar Al Khaleej, Mr Al Ansari said SIO backs the move which would prolong the sustainability of the pension fund until 2036, instead of 2030.

Under the parliamentary proposal, expatriates working in the public and private sectors would pay monthly contributions to the fund and get end-of-service benefits.

While approving the idea of including expatriates, SIO said the procedure should be implemented under another format other than the military pension law.

MPs had urged the inclusion of expatriates which improves liquidity to reduce the actuarial deficit and enhance the fund’s sustainability. They also called on the government to suspend law decree 12 of 1977 which stopped social insurance for non-Bahrainis.

The defunct 1976 law on social insurance had until then applied to all private sector employees before it was repealed.

Under the new pension law still under study, the minimum retirement age is fixed at 55 years. Those who retired before the age of 60 will have their pension salaries slashed by six per cent a year.

The pension salary will be calculated on the basis of the average salary for the past five years.

Pension salaries below BD500 will be increased by 3pc one time only and pension contributions increased to 7pc.

The draft pension law which is being scrutinised gives employees the option to work until the age of 65.

Source: https://www.gdnonline.com/Details/966650/Plan-to-include-expat-workers-in-pension-fund