Decision No. (1022) dated 26/12/1445 AH
The Council of Ministers
After reviewing the correspondence received from the Royal Court No. 85921 dated 28/11/1445 AH, regarding matters related to the strategy for reforming pension systems in the Kingdom and the draft Social Insurance Law.
After reviewing the aforementioned draft law.
After reviewingthe Civil Pension Lawissued by Royal Decree No. (M/41) dated 29/7/1393 AH.
After reviewingthe Social Insurance Lawissued by Royal Decree No. (M/33) dated 3/9/1421 AH.
After reviewing memoranda No. (2160) dated 28/11/1442 AH, No. (1659) dated 23/7/1443 AH, and No. (3421) dated 26/9/1445 AH, and server process No. (212) dated 20/12/1445 AH, prepared by the Bureau of Experts at the Council of Ministers.
After reviewing the server process prepared by the Council of Economic and Development Affairs No. (1984/45/M) dated 16/10/1445 AH.
After considering the Shura Council decision No. (383/36) dated 26/11/1445 AH.
After reviewing the recommendation of the General Committee of the Council of Ministers No. (13192) dated 24/12/1445 AH.
It is decided as follows:
First:Approval of the Social Insurance Law in the attached form.
Second:The provisions of the law referred to in item (First) of this decision shall not apply to the following two categories:
1- Subscribers who have previous subscription periods before the law’s effective date that have not been compensated for.
Subscription periods in the context of paragraph (1) of this item mean the subscription periods calculated according to the provisions of the Civil Pension Law issued by Royal Decree No. (M/41) dated 29/7/1393 AH, or the Social Insurance Law issued by Royal Decree No. (M/33) dated 3/9/1421 AH, or both.
This also extends to periods considered equivalent to periods served under either of these two laws.
2- Pension beneficiaries entitled under the provisions of the Civil Pension Law or the Social Insurance Law before the effective date of the law referred to in item (First) of this decision.
Third:The application of the law - referred to in item (First) of this decision - to those subject to its provisions shall be as follows:
1- The contribution rates for the pension branch stipulated in Article (15) of the law shall be applied gradually until reaching (22%) of the wage or salary subject to contribution, as follows:
A- Contributions shall be set at (18%) during the twelve months following the law’s effective date.
B- Contributions shall be set at (19%) from the month following the completion of twelve months from the law’s effective date.
C- Contributions shall be set at (20%) from the month following the completion of twenty-four months from the law’s effective date.
D- Contributions shall be set at (21%) from the month following the completion of thirty-six months from the law’s effective date.
E- Contributions shall be set at (22%) from the month following the completion of forty-eight months from the law’s effective date.
2- The employer shall bear (50%) and the subscriber shall bear (50%) of the contributions referred to in paragraph (1) of this item, regarding mandatory contributions.
3- The provisions of paragraph (1) of this item shall apply to voluntary subscriptions, with the subscriber bearing the full cost.
4- The date for applying the provisions of the occupational hazards branch and additional compensations to employees shall be determined by a Council of Ministers decision based on a proposal from the Board of Directors of the General Organization for Social Insurance. In the event of the employee’s death or dismissal during the period after the law’s effective date and before the date specified by the Council of Ministers decision, due to permanent disability resulting from work and occurring during the performance of work, entitlement shall be determined according to Article (21) of the Civil Pension Law, without prejudice to the disability being proven by the medical committees of the General Organization for Social Insurance as stipulated in Article (50) of the law referred to in item (First) of this decision.
5- The subscription period referred to in paragraph (2) of Article (16) of the law shall be (180) months.
6- In applying the provisions of paragraph (2) of Article (44) of the law, contributions to the unemployment insurance branch at the law’s effective date shall be set at (1.5%) of the wage subject to contribution, borne equally by the employer and the subscriber (50% each).
7- Without prejudice to the preceding paragraphs of this item, the application of the social insurance branches stipulated in Article (3) of the law referred to in item (First) of this decision shall be phased as determined by a decision of the Board of Directors of the General Organization for Social Insurance.
Fourth:The provisions of the Social Insurance Law issued by Royal Decree No. (M/33) dated 3/9/1421 AH, the Civil Pension Law issued by Royal Decree No. (M/41) dated 29/7/1393 AH, and the Unemployment Insurance Law issued by Royal Decree No. (M/18) dated 12/3/1435 AH, shall continue to apply to the two categories referred to in item (Second) of this decision.
Fifth:Exceptionally from the provisions of item (Fourth) of this decision, subscribers with previous subscription periods before the effective date of the law - referred to in item (First) of this decision - who have not been compensated for those periods, whose subscription periods have not reached (240) months and who have not reached (50) Hijri years at the law’s effective date, shall be treated as follows:
1- A subscriber who has not reached the age of (29) Gregorian years at the law’s effective date shall have the statutory retirement age of (65) Gregorian years.
2- A subscriber who is (29) Gregorian years or older at the law’s effective date shall have the statutory retirement age according to the following table:
Age according to the Gregorian calendar at the law’s effective date
Statutory age according to the Gregorian calendar for pension entitlement
Twenty-nine years or more, and less than thirty years
Sixty-four years and eight months
Thirty years or more, and less than thirty-one years
Sixty-four years and four months
Thirty-one years or more, and less than thirty-two years
Sixty-four years
Thirty-two years or more, and less than thirty-three years
Sixty-three years and eight months
Thirty-three years or more, and less than thirty-four years
Sixty-three years and four months
Thirty-four years or more, and less than thirty-five years
Sixty-three years
Thirty-five years or more, and less than thirty-six years
Sixty-two years and eight months
Thirty-six years or more, and less than thirty-seven years
Sixty-two years and four months
Thirty-seven years or more, and less than thirty-eight years
Sixty-two years
Thirty-eight years or more, and less than thirty-nine years
Sixty-one years and eight months
Thirty-nine years or more, and less than forty years
Sixty-one years and four months
Forty years or more, and less than forty-one years
Sixty-one years
Forty-one years or more, and less than forty-two years
Sixty years and eight months
Forty-two years or more, and less than forty-three years
Sixty years and four months
Forty-three years or more, and less than forty-four years
Sixty years
Forty-four years or more, and less than forty-five years
Fifty-nine years and eight months
Forty-five years or more, and less than forty-six years
Fifty-nine years and four months
Forty-six years or more, and less than forty-seven years
Fifty-nine years
Forty-seven years or more, and less than forty-eight years
Fifty-eight years and eight months
Forty-eight years or more, and less than forty-eight years and six months
Fifty-eight years and four months
3- A subscriber whose subscription period at the law’s effective date - referred to in item (First) of this decision - has not reached (180) months shall be entitled to a pension before reaching the statutory age if his subscription period reaches (360) months.
4- A subscriber whose subscription period at the law’s effective date - referred to in item (First) of this decision - has reached (180) months or more shall be entitled to a pension before reaching the statutory age according to the following table:
Subscription periods at the law’s effective date
Subscription periods qualifying for pension entitlement
From (180) months to (191) months
(348) months
From (192) months to (203) months
(336) months
From (204) months to (215) months
(324) months
From (216) months to (227) months
(312) months
From (228) months to (239) months
(300) months
5- Subject to the provisions of paragraphs (1), (2), (3), and (4) of this item, subscription periods that have not been compensated for shall be treated according to the provisions of the Civil Pension Law and the Social Insurance Law referred to in item (Fourth) of this decision.
For the purposes of applying this item, a subscriber who reaches the age of forty-eight years and six months according to the Gregorian calendar at the law’s effective date shall be considered as having reached the age of fifty Hijri years.
Sixth:Exceptionally from the provisions of item (Fourth) of this decision, the application of the occupational hazards branch provisions contained in the Social Insurance Law referred to in item (Fourth) of this decision shall be as follows:
1- Application of maternity compensation stipulated in Articles (41) and (42) of the law - referred to in item (First) of this decision - to subscribers subject to the occupational hazards branch provisions in the Social Insurance Law referred to in item (Fourth) of this decision, provided that the calculation of the qualifying subscription period for entitlement shall start from the effective date of the law referred to in item (First) of this decision.
2- Cancellation of the upper limit for the lump-sum compensation amount in cases of total and partial disability stipulated in Articles (32) and (36) of the Social Insurance Law referred to in item (Fourth) of this decision.
3- The age after which the lump-sum compensation amount is reduced as stated in Article (32) of the Social Insurance Law - referred to in item (Fourth) of this decision - shall be the same age as stated in paragraph (3) of Article (35) of the law referred to in item (First) of this decision.
Seventh:The Board of Directors of the General Organization for Social Insurance may establish optional savings programs - in coordination with relevant authorities - for subscribers subject to the provisions of the Civil Pension Law and the Social Insurance Law referred to in item (Fourth) of this decision.
Eighth:The Board of Directors of the General Organization for Social Insurance may add benefits to a subscriber whose subscription period exceeds (100%) of the salary or average wages on which the pension is calculated according to the provisions of Article (19) of the Civil Pension Law and Article (38) of the Social Insurance Law referred to in item (Fourth) of this decision.
Ninth:The Board of Directors of the General Organization for Social Insurance may merge the accounts of the branches of the Social Insurance Law, the Unemployment Insurance Law, and the Civil Pension Fund - referred to in item (Fourth) of this decision - or some of them as deemed appropriate.
Tenth:The provisions of items (Fifth), (Sixth), (Seventh), (Eighth), and (Ninth) of this decision shall be effective from the date of the law’s effective date referred to in item (First) of this decision.
A draft Royal Decree has been prepared for items (First), (Second), (Fourth), (Fifth), (Sixth), (Seventh), (Eighth), (Ninth), and (Tenth), and paragraphs (1), (2), (3), (4), and (7) of item (Third) of this decision, the text of which is attached hereto.
Eleventh:A committee shall be formed within the Ministry of Human Resources and Social Development with the participation of the Ministry of Finance, the Ministry of Economy and Planning, and the General Organization for Social Insurance to review the laws, regulations, royal orders, royal decrees, and decisions affected by the issuance of the law - referred to in item (First) of this decision - and the above items, particularly the following:
1- Provisions in other laws related to the retirement age.
2- Provisions contained inthe Civil Pension Lawandthe Social Insurance Lawandthe Law of Benefit Exchange between the Civil and Military Pension Laws and the Social Insurance Law.
3- Maternity and childbirth leaves stipulated inthe Labor Lawissued by Royal Decree No. (M/51) dated 23/8/1426 AH, andthe Implementing Regulation of Human Resources in Civil Serviceissued by the decision of the Minister of Human Resources and Social Development No. (1550) dated 9/6/1440 AH.
4- Harmonization between the Civil Pension Law, the Social Insurance Law, the provisions contained in the preceding items, and the law referred to in item (First) of this decision.
And to submit what requires amendment according to the applicable legal procedures within (ninety) days from the date of this decision.
Prime Minister
Social Insurance Law - 1445 and its Executive Regulation
Part 1: General Provisions
Article 1
In this Law, the following words and phrases shall have the meanings assigned thereto, unless the context requires otherwise:
Law: Social Insurance Law.
Regulations: Implementing Regulations of the Law.
Organization: General Organization for Social Insurance.
Board of Directors: Board of Directors of the Organization.
Minister: Minister of Finance.
Governor: Governor of the Organization.
Employer: A natural or legal person employing one or more workers or employees for a wage or salary.
Employee: A natural person who, in exchange for a salary, holds a position in the State civil service or performs its duties, regardless of the nature of his work or his job title.
Worker: A natural person who, in exchange for a wage, works for an employer and under his management or supervision.
Contributor: A person covered by any of the social insurance branches, savings programs, or insurance products.
Compensations: Benefits, whether monetary or non-monetary, provided to a contributor under any of the social insurance branches, savings programs, or insurance products. Competent Medical Board: The medical boards provided for in Article 50 of the Law.
Insurance Products: Any product that provides insurance protection to certain categories against specific risks, subject to the provisions specified therefor.
Article 2
For the application of the provisions of this Law, the words “year” and “month” shall refer to units of time according to the Gregorian calendar
Article 3
This Law shall include the following social insurance branches:
1. Annuities branch.
2. Occupational hazards and additional compensations branch.
3. Unemployment insurance branch.
Article 4
The Board of Directors may, in coordination with the relevant entities, introduce voluntary savings programs in accordance with the provisions specified in the Regulations.
Article 5
Mandatory insurance products may, pursuant to a Council of Ministers resolution issued upon a proposal by the Board of Directors, be introduced for any of the following categories; the resolution shall determine the necessary provisions therefor.
a) Saudi nationals, other than workers, who engage in works, activities, or professions.
b) Non-Saudi workers, other than those provided for in Article 6 of this Law and in the provisions of the occupational hazards and additional compensations branch.
Article 6
The categories listed hereunder shall be covered by the provisions of the social insurance branches pursuant to a decision by the Board of Directors and in accordance with the provisions specified in the Regulations. The categories shall be as follows:
1. Workers employed by foreign international diplomatic, political, or military missions.
2. Workers employed to perform farming, forestry, or herding work.
3. Seafarers, including fishermen.
4. Domestic workers.
5. Non-Saudi workers entering the Kingdom on a temporary or seasonal work visa for a period not exceeding 60 days.
6. Craftsmen who work from home.
7. Players and coaches of sports clubs and federations.
Article 7
The Regulations shall specify the following:
a) The method of registration in the social insurance branches for employers and contributors who are subject to this Law.
b) The time limit for employers to register contributors who meet the conditions of coverage of any of the social insurance branches as well as the time limit for employers to remove contributors who no longer meet such conditions.
c) The time limit for a contributor to register himself in any of the social insurance branches if he meets the conditions of coverage of any of such branches as well as the time limit for a contributor to request removal from such branches if he no longer meets such conditions, in the event that the employer refuses or delays registration or removal.
d) The provisions relating to registration and removal upon the expiration of the time limits specified for employers and contributors.
Article 8
1. Contributions for each social insurance branch shall be computed on the basis of the basic wage or salary; the Regulations may add any other benefits and allowances received by the contributor to such basis, provided that the amount used as a basis for the computation of contributions is not less than the minimum wage or salary determined by the competent authority. The Regulations shall specify the criteria on the basis of which the contributions of voluntary contributors are computed as well as the computation method thereof.
2. The maximum contributory wage or salary shall be forty-five thousand riyals (SAR 45,000) per month.
3. The maximum contributory wage or salary provided for in paragraph (2) of this Article may be amended pursuant to a Council of Ministers resolution issued upon a proposal by the Board of Directors based on the revision of wage and salary levels and the results of actuarial studies.
4. An employer shall, within the time limit specified in the Regulations and according to the method determined by the Organization, submit to the Organization the data of contributory wages or salaries.