Pension benefits for private sector
The Shura Council has approved a law that will allow private sector employees to purchase assumed years of service so that they can enjoy relevant pension benefits in line with civil servants and military personnel.
Under the law, the insured may request to include an assumed period of service in the insurance subscription period, for a maximum of five years.
The total period shall not exceed the period entitling the employee at the retirement age to receive the maximum amount of pension against payment of an additional amount to the Social Insurance Organisation.
The period of assumed years of service entitling the insured to pension depends on the insurance subscription period as stipulated in articles 34 and 37 of the Law on Social Insurance promulgated by Legislative Decree No 24 of 1976.
Just like in the public and military sectors, the law will allow an employee in the private sector to buy the five years which can be taken as a loan that is reduced from the salary every month for that time period.
After which the employee can add those years to the years of service which will go towards determining the pension benefits.
“This will create equality between the employee in the private sector and the public sector or someone working in the military,” services committee chairwoman Dr. Jehad Al Fadhel told the Gulf Daily News.
“The people who benefit the most from this law will be Bahraini residents, the percentage of people to whom this applies is large.
“This will also motivate Bahrainis to seek jobs in the private sector. There are many benefits in the public sector but when you bring in those benefits to the private sector, there will be less pressure on public sector.
“There won’t be long waiting queues for government jobs and motivation to diversify the job market in the private sector,” she said.
According to Dr. Al Fadhel most people gravitate towards government jobs because of those benefits and they can go into early retirement if they bought those assumed years of service.
However, through laws like these and others that will unify pension benefits for all sectors in the future it will make all sectors seem equally appealing to Bahrainis which will create a balanced job market. The final vote and discussions will be held during the council’s next session.
