Services Committee declines support ‘in principle’ for three pension, retirement amendments

TDT | Manama

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The Shura Council is set to discuss three draft laws during its 24th session of the fourth term in the sixth legislative chapter today, with a focus on proposed amendments to pension and retirement regulations across government, military, and private sectors.

At the center of deliberations are amendments to Article (87) of Law No. (13) of 1975 on government pensions and retirement bonuses, Article (41) of the Military Retirement Law under Decree-Law No. (11) of 1976, and Article (90) of the Social Insurance Law under Decree-Law No. (24) of 1976.

All proposals were submitted by the Council of Representatives.

After reviewing the drafts, the Services Committee stated it does not support the three laws in principle.

Framework

It underscored the importance of assessing the proposals within the broader legislative framework jointly adopted by the executive and legislative authorities in recent years to reform pension and social insurance systems.

Ongoing reforms seek to recalibrate retirement benefits and obligations, ensuring financial sustainability, optimizing expenditures, and preserving the system’s ability to meet both current and future commitments.

Concerns were raised that the proposed amendments, which aim to increase marriage grants for certain eligible groups, run counter to these reform objectives.

Measures

Such measures were seen as inconsistent with the core principles underpinning earlier reforms.

Adopting the proposals, the committee noted, would represent a departure from the established legislative direction aimed at balancing benefits and obligations within a comprehensive reform strategy.

It further stressed that any increase in pension or retirement benefits must be supported by sound financial and actuarial analysis, clearly demonstrating the impact on the fund’s financial position and its capacity to absorb additional commitments without jeopardizing existing and future obligations.

However, the draft laws were found to lack the necessary financial assessments and technical studies, leaving them insufficient for informed legislative consideration.

Furthermore, the committee highlighted that pension and social insurance legislation requires stability, as its effects are long-term and cannot be measured by immediate results.

Amendments

Frequent amendments before evaluating the impact of previous changes would undermine financial and actuarial balances.

Any legislative change must consider the fund’s financial capacity, especially given its current actuarial deficit, as imposing new obligations at this stage could threaten financial sustainability