Saudi GOSI clarified that the new Social Insurance Law applies exclusively to new civil employees

The new Social Insurance Law, which was approved by the Council of Ministers on Tuesday and went into effect on Wednesday, as explained by the Saudi General Organisation for Social Insurance (GOSI), is only applicable to newly hired civil employees who join the public and private sectors and do not have any prior contribution periods under the current Civil Pension Law or Social Insurance Law.

Although there would be no changes to the benefits for current GOSI members, the new law calls for a progressive increase in the retirement age.

According to the Saudi Press Agency, which cited GOSI sources, GOSI stressed that the provisions of the Social Insurance Law and the Civil Retirement Law will apply to current subscribers and that there will be an exception to the provisions pertaining to the legal pension entitlement period and the statutory retirement age for certain categories.

The organisation stated that these groups include subscribers who have not yet reached 50 Hijri years of age on the day these adjustments take effect, as well as those whose contribution periods have elapsed beyond 20 years.

The statutory retirement age for individuals affected by the amendments will range between 58 and 65 Gregorian years. Based on the contributor's age on the day the modifications take effect, there will be a progressive increase, beginning with an addition of four months to the present statutory retirement age. In contrast, depending on the contribution period at the time the changes take effect, the needed contribution term for early retirement will vary between 25 and 30 Gregorian years, with a progressive rise beginning with an addition of 12 months to the existing required contribution period.

The General Assembly of Saudi Arabia (GOSI) declared that the existing Civil Retirement Law and Social Insurance Law shall stay unchanged for the surviving subscribers who turn 50 years old or older, or who have had subscriptions for 20 years or longer, on the day these revisions take effect. According to the organisation, further information is available at awareness.gosi.gov.sa. The new legislation and its rules regarding the mandatory retirement age and the minimum contribution periods for pension eligibility will go into effect on July 3, 2024.

Present pensioners and beneficiaries of deceased pensioner's family members are not covered by the changes to the present legislation since their payments remain unchanged. The new law facilitates easy transitions for new workers between public and private sector employment, and also increases GOSI contribution rates at a rate of 0.5 percent annually for four years, beginning in the second year.