The previous retirement systems were various in terms of the covered categories, contribution rates, definition of salary subject to contribution, rate of pension entitlements, and conditions for pension entitlement. Such variations resulted in considerable challenges to transfer periods of service across the various systems, the sustainability of these programs considering the demographic distribution across numerous systems, in addition to the challenge posed by the coverage of part-time workers and contract workers.
The Insurance for Old Age, Disability, and Death (new pension program) under the Social Protection Law covers all sectors, businesses, and categories as it addresses the challenges associated with mobility from one sector to another, achieves insurance coverage for workers in all forms of employment and contracts and, therefore, unified the conditions for pension entitlement as well as contribution rates and pension calculation rates. Under the new pension system, the contributions paid by the worker and employer are directly reflected on the entitlements of the insured person to ensure equity among all categories. The system is integrated with mechanisms capable of re-evaluating the value of contributions paid by the insured person and employer during the employment period so that their real value is maintained upon the calculation of pension entitlements. The new system also included mechanisms to increase the annual pensions on a yearly basis.
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