Private Sector Retirees Can Now Access Replacement Loans Every Two Years
The government has approved a draft law submitted by the Council of Representatives to reduce the waiting period for private sector retirees to access “replacement loans.” Under the new proposal, retirees will be able to obtain a new replacement loan every two years from the date of their last loan, bringing private sector retirees in line with their counterparts in the public and military sectors.
Currently, private sector retirees can only reapply for a replacement loan two years after paying off the final installment of their previous loan, effectively creating a longer waiting period than in other sectors.
In its response, the government expressed support for the objectives of the parliamentary proposal, noting that the amendment would not compromise the integrity of the pension system or the financial balance of the funds. It emphasised that the change preserves the rights of contributors and beneficiaries, while improving retirees’ living standards and promoting social justice and financial sustainability.
The draft law was submitted by a group of MPs led by Basma Mubarak, alongside Ahmed Al-Salloom, Maryam Al-Dhaen, Abdullah Al-Rumaihi, and Ali Al-Dosari.
MP Basma Mubarak said that the main goal of the proposal is to ensure equality between private sector retirees and government retirees, in line with the provisions of the Government Employees’ Pensions Law No. (13) of 1975 and the Military Retirement Law. She added that the amendment would provide retirees with greater financial flexibility, enhance living standards, and encourage engagement in the private sector, in line with national development policies.
The replacement loan system, administered by the Social Insurance Organisation, allows retirees to exchange part of their pension for a lump-sum financing amount, repayable in instalments. Eligibility conditions include age and health status, with repayment periods ranging from five to fifteen years.
The government’s memorandum emphasised its commitment to fairness and equality in benefits for insured members and beneficiaries, highlighting the importance of maintaining the sustainability of social insurance systems. Financial and actuarial studies ensure that the funds can meet their long-term obligations.
Authorities described the proposed amendment as a balanced step, combining social justice with financial sustainability, and reinforcing confidence in the pension system.
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