Kuwait reviews pension plans for those revoked for ‘noble deeds’

• Ministry of Finance officials are reviewing a scenario in which retirees whose citizenship was revoked for “excellent deeds” receive pensions under Article 8, based on years of service, retirement age, salary, and premiums paid, excluding special benefits like financial rewards or interest-free loans.

• The social insurance system covers 715,282 civilians and military personnel, including 414,657 civilians, with 160,657 civilian and 39,587 military retirees, while government-sector insured persons include 124,526 males averaging KD 733 and 201,237 females averaging KD 570.

The Ministry of Finance officials are in discussions with the Public Institution for Social Security regarding the estimated cost of addressing the cases of retirees whose Kuwaiti citizenship was revoked under Article 5 of the “Gracious Works” Act. The revocations affect retirees who meet eligibility criteria or have contributed insurance premiums for several years, qualifying them for a retirement pension, including at the early retirement rate, reported Al Rai newspaper.

Required documents

Last August, the Social Insurance issued a circular detailing the procedure for notifying end of service and the documents required to disburse retirement pensions to individuals whose Kuwaiti citizenship was revoked under Article 8. The move implements Cabinet Resolution No. 863, issued during its June 24 meeting, which addresses the insurance rights of those whose citizenship was revoked. The resolution is based on Article 4/13 of Decree No. 15/1959 concerning Kuwaiti citizenship and its amendments, stipulating that retirement pensions be granted to eligible individuals in accordance with Chapter Three of the Social Insurance Law.

Sources noted that no specific government decision has yet been made on handling insurance benefits for retirees whose citizenship was revoked. As part of a proactive approach to assess the financial impact on the general budget and identify potential funding sources, Ministry of Finance officials are reviewing the costs of various scenarios. This study aims to provide a clear framework for any scenario approved by the Cabinet in the future, including the mechanism and conditions for pension disbursement.

Ministry officials are considering a scenario in which retirees whose citizenship was revoked for “excellent deeds” receive pensions using the same mechanism under Article 8. Key criteria include years of service, retirement age, basic salary, and premiums paid. Any payouts are expected to exclude special benefits granted to regular retirees, such as financial rewards or interest-free loans paid in installments, which are normally offered under the Social Insurance scheme.

The Social Insurance circular specifies that eligibility requires at least 15 years of service, excluding days of absence, and reaching the prescribed retirement age, which is 50 for women. These provisions aim to ensure fair treatment while maintaining compliance with the law.

Cost estimation

Sources stated that one of the cost-estimation scenarios involves paying insurance amounts to retirees whose citizenships were revoked for “deserving deeds.” This insurance bonus would cover their fully paid premiums, with an additional margin calculated according to Social Insurance standards. The amount would vary depending on each individual’s years of service and the value of their monthly premiums.

Officials noted that under this scenario, the Social Insurance Corporation would record the payments as a one-time expense on its balance sheet. This constitutes a non-recurring general expense, meaning the corporation would not be obligated to provide a retirement pension to the individuals or their heirs for life.

The sources emphasized that the Ministry of Finance’s role in these scenarios is limited to estimating financial costs and does not imply approval. The final decision on handling insurance rights for individuals whose citizenships have been revoked rests solely with the government. The Social Insurance Corporation cannot act without a specific law or mandate, similar to procedures under Article 8 for revoked citizenship cases.

Exchange pressures

Ministry officials are aware that the Social Insurance Law restricts retirement pensions to Kuwaiti employees and certain legally specified individuals. Granting pensions to non-citizens would require a law or government amendment. The ministry’s review is intended to estimate costs for all hypothetical scenarios in advance, helping to prevent unexpected pressures on the general budget when the government decides on the necessary measures.

KD 300 million in retirement pensions paid monthly

The total monthly cost of pensions disbursed by the Social Insurance Corporation is estimated at approximately KD 300 million.

According to the General Organization for Social Insurance’s report for the first quarter of this year, the total number of civilians and military personnel covered by the social insurance system reached 715,282, including 414,657 civilians.

The number of living retirees totals 160,657 civilians and 39,587 military personnel. Among government-sector insured persons, there are 124,526 males with an average salary of KD 733 dinars 201,237 females with an average salary of KD 570.