KSA strengthens social insurances laws amid economic growth, development

KSA strengthens social insurances laws amid economic growth, development

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Most of the rules and conditions in the Kingdom’s social and civil insurance systems are being overhauled.

Officials are preparing to strengthen the insurance system to match the Kingdom’s economic expansion and the development of local talent and recruitment.

A few recent amendments have been launched for the civil pension law, social insurance law, law of benefit exchange between the civil and military pension laws and social insurance law related to employees’ dues upon retirement as a reward or pension.

The amendments to the civil pension law stipulate that if the employee’s service ends without reaching the period that entitles them to benefit from a pension, they will be paid a bonus of 14 percent of their annual salary for each year of their service.

However, in the event that the termination of service was due to resignation or dismissal for a disciplinary reason, the bonus shall be calculated at a 10 percent rate.

This payment will be processed once the recipient reaches 60 or in the event of their death, whichever is earlier. Moreover, if the employee’s service ends by the time they reach 60 without them being employed for at least 10 years, they will still be rewarded with a pension.

However, if their service period is less than five years once they reach 60, they may request the inclusion of a nominal period — provided that the period after the inclusion does not exceed 10 years — and the employee must pay the full shares for each month of the added period on the basis of their final monthly salary.

As for the amendments to the social insurance law, the contributor, in case of leaving work, has the right to receive the lump sum compensation due without reaching 60, or in the event of a disability, in the cases specified by the regulation.

Enabling employees to receive the most important legal updates will play a key role in empowering them to fulfill their rights. Accordingly, all relevant government websites have communications channels for any questions and inquiries.

Dimah Talal Alsharif is a Saudi lawyer and legal consultant. Twitter: @dimah_alsharif

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