House of Representatives Advisor Calls for Including Foreigners in Retirement Law and Allowing them to Benefit from Unemployment Insurance Revenues
2018-09-08 - 8:51 p
Bahrain Mirror: Economic advisor in the House of Representatives Abdullah Al-Sadiq said that treatment of the actuarial deficit of the pension funds requires an increase in the number of participants for retirees.
He said the statistics show that the number of retirees and beneficiaries is about 81.579, while the number of Bahraini subscribers is 146.555, so the number of participants per retiree is 2 for each individual.
He stressed that there is need to increase the number of contributors per retiree, adding that this can be achieved through number of measures, including the reduction of early retirement, the creation of a mechanism to introduce foreign workers in social insurance, and the utilization of the resulting cash flows.
Al-Sadiq suggested to apply a mechanism to foreigners in pension funds on the basis that a percentage of 6%, for example, be applied to foreign workers and a lump sum of 5 dinars per person to employers, thus there would be no significant burden on the private sector, and the system could be saving as in Malaysia, as this step will allow entering half a million people and the number of subscribers will increase.
Among the solutions suggested by Al-Sadiq is to take advantage of the benefits of the unemployment insurance fund, as well as his call to increase the contribution of work injury by 3%, noting that this increase will be able to cover the deficit in the pension funds especially in the medium and long term, and can be distributed on the basis 1.5% from the government in the state fund, and similarly for the private pension fund.
He called for new resources, as an innovative solution, from outside the pension fund to strengthen the financial status of pension funds, and for improving the macroeconomic environment and increasing the rate of economic growth.