Saudi Arabia to Introduce Voluntary Pension and Savings Scheme for Foreign Workers

Saudi Arabia is set to launch a new voluntary pension and savings program open to both Saudi nationals and expatriates, aiming to boost household savings and manage the flow of remittances abroad, according to the International Monetary Fund’s (IMF) latest Article IV consultation report, cited by Al-Eqtisadiah newspaper.

The Public Pension and Savings Program, expected to be unveiled soon, comes amid rising foreign remittances from the Kingdom, which grew 14 percent last year to SR144.2 billion ($38.4 billion). Over the past decade (2015–2024), remittances totaled SR1.43 trillion, highlighting the significant outflow of funds by foreign workers.

As of the first quarter of 2025, Saudi Arabia’s social insurance system had 12.8 million subscribers, with expatriates accounting for 77 percent — nearly 10 million individuals. The voluntary scheme aims to encourage these workers to save locally, potentially reducing the outflow of funds.

The IMF report noted that recent pension reforms approved in July 2024, including raising the retirement age, extending contribution periods, increasing contribution rates, and limiting pension benefits, are expected to strengthen the long-term sustainability of the system. While immediate fiscal savings are unlikely, the reforms are designed to ensure financial stability over the medium term.

The new program is seen as a positive step toward enhancing household savings for both Saudis and foreign workers, while also improving financial transparency. The IMF highlighted the Public Pension Authority’s assets, which currently represent 32 percent of Saudi Arabia’s GDP, emphasizing the importance of clearer allocation rules and stronger disclosure practices.

This initiative reflects the Kingdom’s ongoing efforts to modernize its social insurance system and balance economic growth with financial prudence.