Urgent: Details of regulatory amendments related to pension systems and mechanisms for transformation and privatization
In addition to providing it with all data and information related to the employees and workers covered by these decisions within a similar period from the date of implementation.
Royal decree amending the system of exchange of benefits
Royal Decree No. M/208, dated 20/9/1447 AH, was issued after reviewing Shura Council Resolution No. 14/178, dated 3/7/1447 AH, and Cabinet Resolution No. 687, dated 14/9/1447 AH. The decree amends the System for the Exchange of Benefits between the Civil and Military Retirement Systems and the Social Insurance System, issued by Royal Decree No. M/53, dated 23/7/1424 AH.
The decree stipulates the deletion of paragraph (5) of Article Six of the System for the Exchange of Benefits, and directs His Royal Highness the Prime Minister, the Ministers, and the Heads of Independent Agencies to implement it, each within their respective jurisdictions, as part of updating relevant legislation.
New foundations for addressing actuarial impact
These amendments were based on a comprehensive study of the mechanisms supporting the General Organization for Social Insurance. The Council approved considering the actuarial impact resulting from transformation and privatization processes as an inherent part of pension systems, to be measured through periodic actuarial studies prepared by the organization. The amendments also allow for the compensation of pension funds through reactive financing should they experience a financial deficit.
The decision specified the mechanism for calculating this impact, which involves calculating the net actuarial gains and losses for each pension fund, focusing solely on previously acquired entitlements.
Termination of work on a number of materials and regulations
The decision included terminating several previous articles and regulations, including the cancellation of Articles 26 and 27 of the rules governing the treatment of employees in sectors targeted for transformation and privatization, issued by Cabinet Resolution No. 616 of 1442 AH.
It also included terminating clauses five and six of the rules issued by Cabinet Resolution No. 210 of 1429 AH.
It also stipulated the cancellation of provisions relating to the formation of committees responsible for studying the additional financial costs resulting from the transformation or privatization, as well as the cancellation of all decisions issued by technical committees whose decisions were not officially approved by the Cabinet, in a step aimed at unifying regulatory references and enhancing governance.
Completion of the transformation and allocation procedures
The Cabinet emphasized the importance of completing the transformation and privatization procedures for the relevant entities, in accordance with the new regulations outlined in the resolution, to ensure their organized implementation and consistency with the approved amendments.
The resolution stressed the obligation of these entities to notify the General Organization for Social Insurance of any transformation or privatization decisions within 30 days of their issuance.
Furthermore, they must provide the organization with all required employee and worker data within 30 days of implementation, thereby contributing to the preservation of insurance rights and enhancing the efficiency of data exchange among government entities.
