The Saudi General Organization for Social Insurance (GOSI) recently implemented a new Social Insurance Law that is applicable to new civil employees joining the public and private sectors. The law, which came into effect immediately after being approved by the Council of Ministers, does not impact current subscribers of GOSI. The benefits for existing subscribers will remain the same, with some exceptions for certain categories of individuals. These exceptions include subscribers with less than 20 years of contribution and those under 50 years old at the time the amendments take effect. For these individuals, the statutory retirement age will range between 58 and 65 years, with a gradual increase based on the contributor’s age.
The new law also affects early retirement, with required contribution periods ranging from 25 to 30 years. This will be gradually increased starting with an additional 12 months to the current required contribution period, depending on the contribution period at the time the amendments are implemented. For current subscribers who are 50 years old or older, or have subscription periods of 20 years or more, there will be no changes to their benefits under the current Civil Retirement Law and Social Insurance Law. The provisions related to the statutory retirement age and required contribution periods for pension eligibility will take effect on July 3, 2024.
The amendments to the law do not impact current pensioners or beneficiaries of deceased pensioners, as they will retain the same benefits without any changes. The new law aims to make it easier for new entrants to the labor market to move between jobs in the public and private sectors. GOSI contribution rates will be gradually increased over a four-year period, starting from the second year, at a rate of 0.5 percent each year. Additionally, maternity compensation will contribute to the empowerment and employment of women in the labor market while reducing financial burdens on employers.
The new Social Insurance Law is part of the Saudi government’s efforts to enhance social insurance for civil employees and ensure the sustainability of pension funds. GOSI emphasized that the amendments are designed to provide better benefits and support for new entrants to the workforce, while maintaining the current benefits for existing subscribers. The gradual increase in retirement age and required contribution periods reflects the changing demographics and workforce dynamics in the country, ensuring a more stable and secure future for retirees.
It is important for individuals affected by the amendments to familiarize themselves with the new provisions related to retirement age, required contribution periods, and eligibility for pension benefits. GOSI has provided detailed information on their website for subscribers to access and learn more about the changes. By staying informed and understanding the implications of the new Social Insurance Law, individuals can better prepare for their retirement and financial security in the future. The amendments aim to create a more inclusive and sustainable social insurance system that meets the needs of the evolving workforce in Saudi Arabia.
