Emergency reserve fund for pensions, backed by surplus revenues

TDT | Manama

Email : editor@newsofbahrain.com

A proposal to establish a government-backed Emergency Reserve Fund for Pensions will be presented to Parliament next Tuesday.

The fund is designed to use surplus revenues to ensure the stability of pension payouts without burdening workers with additional costs.

Similar to the Future Generations Reserve Fund, the scheme aims to safeguard against pension shortfalls by investing in international assets.

The proposal, put forward by MPs Bader Saleh Al Tamimi, Ahmed Salman Al Musallam, Mohammed Al Ahmed, Dr. Hisham Al Ashiri, and Hamad Al Doy, seeks to create a long-term solution to pension sustainability.

MP Bader Saleh Al Tamimi highlighted that such funds are proven methods to secure pension systems. “The logic is simple—ensuring stability for retirees through a system that grows independently of state budgets.”

While the Social Insurance Organisation (SIO) acknowledged the importance of extending the life of pension funds, CEO Iman Al Murabati noted that the issue is beyond their direct control. “Maintaining a healthy pension fund requires balancing income and spending to meet obligations to both current and future retirees.”

If approved, the fund would align with international practices, as outlined by the International Monetary Fund (IMF), which categorises sovereign wealth funds for uses like emergency pension reserves, fiscal stabilisation, and future savings. This shift would allow Bahrain to rely on investments rather than solely on ongoing contributions to maintain its pension reserves.