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Government and private sector workers can choose pension plans
Government and private sector workers will soon be granted an option of choosing the manner in which their pension payments are calculated.
They get to choose between a one-off 10 percent hike to their monthly pension, or a lump-sum bonus calculated at three percent of their average salary, multiplied by the months of service post-retirement.
Either way, they will be entitled to get their regular monthly pension payments, in addition to the statutory annual increase of 3 percent.
The Shura Council yesterday supported the parliament by approving the measures in a government-drafted bill, originally based on a council proposal.
The Pension Fund Authority (PFA) said it would support the bill, as it would ensure fairness for pensioners, irrespective of their place of work.
The PFA has also agreed to offer the choice to beneficiaries, who inherit the pension, in the event of demise of the breadwinner. However, the recipients will have to submit their choice to the PFA beforehand.
At present, the private sector pensioners are eligible for a 10 percent increase on their monthly pension, while pensioners in the government sector will receive a cash payment.
However, those who have been compelled to quit their job due to permanent injury will get only the 10 percent hike. Giving them the lump sum, would deplete PFA funds, as the recipients will not have completed the requisite years of service, says the bill.
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