Bahrain abolishes $10,500 cap on pensions
Manama, January 15, 2013
Bahrain has abolished a BD4,000 ($10,507) cap on pensions, six years after being implemented, a report said.
The Shura Council approved a new bill, which was backed by the Cabinet after it acknowledged that the current cap was unfair and meant that high-ranking officials were being prevented from receiving their rights, according to the report in our sister publication the Gulf Daily News.
It has been already approved by parliament and will be now ratified by His Majesty King Hamad.
A Pension Fund Commission representative told council members the government acknowledged the problem associated with the article concerned in the Pension Law, issued in 2006, that imposes a cap on pensions meaning that they cannot exceed BD4,000 monthly.
"We have several cases that are being affected by this cap and abolishing it has been a plan with us for some time because it is unfair and means that a number of workers contribute more to pension funds, while receiving less than what they give," he said.
Services committee secretary Abduljalil Al Oinaiti said the cap negatively affected hard working officials in the public and private sectors.
"There are people who work from scratch to become chief executives or senior managers and this means that their wages reach up to BD10,000, but when they retire and instead of getting 80 per cent of their due rights as pensions, they only get BD4,000," he said.
"This means that their lives during retirement is hugely affected considering that the difference is around half of what they should be getting.
"The article was inserted by the government as a precaution in 2006 to prevent any meddling with wages that allows those going on retirement to get more than they deserve, but things have changed and now everything is done through a sequenced computerised system." – TradeArabia News Service