Friday, January 8, 2016

Why retirement age was increased to 62 Years in Saudi Arabia?

A man is subjected and is expected to work. He is the gender that is in charge of putting food on the table, clothes on the body and a shelter over the head. Without the earning of a man, a family has no purpose. He is the figure that is in charge and accounted for all of the financial difficulties and tasks a family must face. We have our fathers, our brothers, our husbands or our sons in the Kingdom of Saudi Arabia who works tirelessly all their life in order to keep the family running. It is because of them that other members of the family enjoy the luxuries and basic necessities of life.

Since man is a living body and one day will grow old. Just as all things in this world are meant to expire, so will man. As a man begins to grow older he no longer has the energy or the health to continue the work that he could even do in his sleep. Hence, the man has a life till the age of retirement when he can earn, educate his children and save up as much as possible so that his later life can be pleasant and free of worries. Until a year ago, the age of retirement varied from place to place within the Kingdom, but soon it was increased to 62 years. Can one say that this was a blessing? Perhaps, they can. The question remains why the retirement age increased to 62 years in Saudi Arabia.

When the Shoura Council announced the increase of the retirement age, there arose a great conflict amongst the Public Pension Agency (PPA). During this time, they had been suffering a deficit. After an investigation, a lot of mismanagement and inappropriate investments were made open done by the agency. The PPA is in charge of providing pensions to teachers, military and civil employees who contribute to the society.

There have been ongoing rumors that the PPA was involved in the November 2006 stock market collapse and lost nearly SR 3 million. It is because of this loss that they have increased the deduction to 5% for civilians and 7% for the military. This was a very weak attempt in order to cover up their mistake since the pension is the right of these retirees and helps them secure their days of luxury and relaxation.

This increase in the retirement age does give most of the elderly a few extra years to earn, but most importantly allows the Public Pension Agency to provide pensions to them after they retire for a couple of years till they are alive. The agency’s deficit has lost a lot of money that was the right of the retirees, but the Shoura Council has tried its very best to eradicate the mistake of the agency back in 2006. No Saudi could ever forget the collapse of the Stock market and perhaps the agency will never be able to either.

Source: Saudi Gazette

Establishing Business in Saudi Arabia
  1. What is the Retirement age in Saudi Arabia?
  2. Who is responsible for significant increase in real estate prices?
  3. The customer is always right, if he is wrong, refer to Rule #1
  4. It’s time to Improve Customer Services in Saudi Arabia
  5. Tourism would replace Oil Exports as main source of Revenue in Saudi Arabia


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