A seven-chapter new social insurance
system was issued in the Kingdom of Saudi Arabia.
The new regulations govern the social insurance system, and covering
the administrative organization of the General Organization for Social
Insurance (GOSI), including its headquarters and branches, board of
directors, administration, and finances.
The regulations delineate all aspects of social insurance, including
vocational risks and pension entitlements. They stipulate, for
example, that vocational risk insurance is applicable to all workers
indiscriminate of sex, age, or nationality; and that the rate of
subscription is 2 percent of the salary of the subscriber to be paid
by the owner of the business. Pension entitlement begins at the age of
not less than sixty years.
Subscription, voluntary for Saudi citizens in private business, is set
at 18 percent of the salary, of which 9 percent is borne by the
employer. Pension insurance, however, excludes civil service, armed
forces and police personnel who enjoy special retirement pension
systems; foreign personnel of international, political or military
organizations; and workers involved in agricultural, marketing,
pastoral, or maritime activities, including fishermen.
The new social insurance scheme, recently ratified by the Council of
Ministers, will come into force on the first day of the new Hijra year
or on March 26, 2001, according to Sulaiman Al-Homaid, governor of the
General Organization of Social Insurance.
Al-Homaid highlighted some notable features of the new scheme at a
press conference. He said under the new rules, the subscription rate
would go up to 18 percent.
The new scheme includes provision for early retirement, pension for
families in the event of a breadwinner being imprisoned, and provision
for artisans and those who pursue their own trades to seek social
insurance coverage. ©Saudia-Online
Compensation before the age of 60 or on disability are two other
features of the new system. Moreover, in the new system women will be
able to retire at the age of 55, he said. ©Saudia-Online
There are also some new provisions, for example compensation at a rate
of his average pay and for the loss of earning due to occupational
hazards. The transportation of the dead body of a subscriber to his
home inside or outside the Kingdom is another provision under the new
Al-Humaid said the minimum level of pension in the event of
non-occupational disability was increased to 50 percent from 40
Receiving a pension from the civil service is not an obstacle to
receiving the GOSI pension. The rate of the disability pension will be
100 percent of the average monthly pay in the case of total
disability. For partial incapacity, the pension rate will be
proportionate to the level of disability, he said. ©Saudia-Online
The subscription rate will be increased to 6 percent in the first year
and 7.5 percent in the second year and to 9 percent in the third year.
The total subscription is fixed at 18 percent, half of which will be
contributed by the employer. ©Saudia-Online
The new statutes of the social insurance will be published in the
government gazette on or after Dec. 27. The new system also brings
parity between the insurance contribution of the employees of the
private sector with that of the civil service and the military. ©Saudia-Online
The minimum pension will be SR1.500 which is same as in the government