Major financial boost for virus fight

TDT | Manama

An emergency fund of over BD177million will be injected into this year’s state budget in order to deal with urgent expenditures incurred as a result of the Kingdom’s fight against the coronavirus (COVID-19) pandemic.

Furthermore, an amount of $450million shall be drawn from the account of the Future Generation Reserve Fund (FGRF), and allocated to supporting the state general budget until the end of the fiscal year, in order to reduce the critical financial impacts of COVID-19.

These follow His Majesty King Hamad bin Isa Al Khalifa’s issuance yesterday of a number of decree-laws. Decree-Law 22/2020 stipulates adding emergency expenditures of BD177,360,117 to the state budget for 2020. The Prime Minister and ministers, each in their capacity, will implement the decree-law that will be published in the Official Gazette.

Meanwhile, His Majesty King Hamad issued Decree-Law 23/2020 on managing part of the funds of the FGRF. It stipulates that the deduction from oil revenues earmarked for the account of the FGRF shall be suspended temporarily, until the end of the fiscal year 2020.

It also stipulates that an amount of $450million shall be drawn from the FGRF account only once, and allocated to supporting the state general budget to reduce the urgent financial impacts of the coronavirus. The drawn amount shall be covered by the end of the urgent financial situation resulting from the COVID-19 spread.

The Finance and National Economy Minister shall issue the necessary edicts and circulars in order to implement the provisions of this decree-law. The Prime Minister and ministers, each in their capacity, shall implement the provisions of this decree-law which takes effect after its publication in the Official Gazette.

Retirement and Social Insurance Fund His Majesty King Hamad also issued Decree-Law 21/2020, regarding pension funds in insurance and retirement laws and regulations. Under the decree-law, the public sector retirement fund and the Social Insurance Fund shall be merged into one, named “The Retirement and Social Insurance Fund”, which shall be overseen by the Social Insurance Organisation (SIO).

Its revenues include those previously allocated for the public sector retirement fund and the Social Insurance Fund, in addition to those incurred from the investment of its funds or any other activities. The decree-law stipulates that the annual rise in all pensions established under any law, pension or insurance scheme, will be stopped.

In case the actuarial report detects a surplus in the fund or the pension fund for Bahraini and non-Bahraini officers and members of the Bahrain Defence and Public Security Force, the surplus will be deposited in a fund that is independent from both funds.

The surplus may be used, based on the approval of the Supreme Council for Military Retirement and the SIO Board of Directors, to increase pensions in a way that would not exceed the increase in the Consumer Price Index, and take the situation of retirees with low pensions.

The decree-law stipulates that retirees are not allowed to receive more than one pension under different retirement and insurance systems, except for those entitled to pensions because of disability, work accidents, or kinship.

The pensioners who are entitled to any of the previous laws and get jobs that are not subject to the same law in which they are entitled to the pension, may combine their previous service period with their new service period, according to the rules stipulated in the retirement and insurance laws and regulations.

They may also choose to continue receiving their pensions for their previous work period, in addition to the salaries they earn from their new jobs, provided that they are not subject to retirement laws and insurance against work accidents. Employers who fail to pay the insurance contributions will have to pay a fine not less than the total value of the unpaid contributions and not exceeding three times its value.

The value of the fines shall be referred to the fund. The Supreme Council for Military Retirement and the Minister of Finance and National Economy shall issue the necessary edicts to implement the provisions of the decree-law, based on the approval of the SIO Board of Directors.