SAUDI ARABIA

14% bonus of annual salary for those leaving service without pension benefit

June 19, 2022
The new Civil Pension Law, approved by the Council of Ministers on June 14, stipulates that those employees, whose service ends without reaching the period that entitles them to benefit from pension, will have a bonus of 14 percent of the annual salary for each year of their service.
The new Civil Pension Law, approved by the Council of Ministers on June 14, stipulates that those employees, whose service ends without reaching the period that entitles them to benefit from pension, will have a bonus of 14 percent of the annual salary for each year of their service.

Saudi Gazette report

RIYADH — The new Civil Pension Law, approved by the Council of Ministers on June 14, stipulates that those employees, whose service ends without reaching the period that entitles them to benefit from pension, will have a bonus of 14 percent of the annual salary for each year of their service.

If the employee’s service is terminated due to resignation or dismissal from service as a disciplinary action, the bonus is calculated on the basis of 10 percent of the annual salary for each year calculated from the years of their service, it was stated in the new law.

The official Umm Al-Qura newspaper published details of the new law, which consists of some amendments to the previous Civil Pension Law, as well as Law of Benefit Exchange between the Civil and Military Pension Laws and Social Insurance Law related to employees’ dues upon retirement as a reward or pension. All these laws are approved by the last weekly session of the Cabinet.

For the payment of bonus stipulated in articles 18 and 23 of the Civil Pension Law, it is required to reach the age of 60 or death, whichever is earlier. If the employee’s service ends by reaching the age of 60 and without reaching at least ten years of service that gives him the right to pension, in such a situation he is entitled to a pension.

In the Social Insurance Law, if the subscriber leaves his job, he is entitled to receive the lump sum compensation due in case of not reaching the age of 60, or in the event of a disability as per the cases specified in the executive regulations of the law.

Under the Law of Benefit Exchange, if the employee’s service period is at least five years and has reached the age of 60, he may request the inclusion of a nominal period, provided that the period after the inclusion does not exceed ten years, and he must pay the full contribution for each month of the added period, on the basis of his last monthly salary.

It is not permissible in the case of merger resulting from transformation or privatization, to combine the retirement pension with the salary of the job covered by any of the civil and military pension laws.

In the event that any public utilities are privatized or their employees transferred from one law to another, the employer is obligated to pay the additional costs pertaining to the two laws, according to the provisions of the law.


June 19, 2022
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