Private sector retirees get a pension-powered lifeline

TDT | Manama

Email : editor@newsofbahrain.com

Private sector retirees can now apply for a new commutation loan every two years — a scheme that lets them take part of their future pension as an advance lump sum and repay it through monthly pension deductions — without needing to clear previous loans first.

A parliamentary proposal enabling this change has been approved by the Government.

The amendment updates the second paragraph of Article 144 of the Social Insurance Law issued under Decree-Law 24 of 1976. Under the new rule, the two-year waiting period will be counted from the date of the last commutation, rather than from the final instalment of the previous loan.

This brings private sector retirees in line with government employees covered by Law 13 of 1975 and those under the Military Pensions Law issued by Decree-Law 11 of 1976.

His Royal Highness Prince Salman bin Hamad Al Khalifa, the Prime Minister, sent the draft amendment to the Council of Representatives in a letter issued under Articles 81 and 92(a) of the Constitution.

The bill aims to support social justice, improve living standards and encourage longer careers in the private sector.

The Cabinet forwarded the proposal to the Legislation and Legal Opinion Commission, which prepared the legal wording without altering its substance. The Commission stressed that social insurance exists to secure income in retirement, disability or illness and to help families maintain their living standards.

It also warned that the change will increase financial obligations on the Pension and Social Insurance fund, as more frequent commutations will place additional pressure on its resources. It called for actuarial studies and for feedback from the bodies managing the schemes.

In finalising the draft, the Commission removed references to unrelated laws and limited the amendment strictly to the paragraph being revised, making only minor wording adjustments without affecting the intent.

The amendment will take effect the day after it is published in the Official Gazette.