Benefit Exchange

The following terms and phrases—whenever used in this Law—shall have the meanings assigned thereto unless the context requires otherwise:

Contributor: Any person with a service subject to the Civil Pension Law, Military Pension Law or Social Insurance Law.

Contribution Period: The period calculated under one of the aforementioned laws.

Lump Sum Settlement: A one-time lump sum disbursed to a contributor in return for his contribution period if such period does not qualify this contributor to obtain a pension pursuant to the law under which it was spent.

Former Law: The Civil Pension Law, Military Pension Law or Social Insurance Law to which a contributor was subject prior to moving to a job subject to the Latter Law.

Latter Law: The Civil Pension Law, Military Pension Law or Social Insurance Law governing the job to which a contributor has moved and under which his service has expired.

Two Laws: The (Civil or Military) Pension Law and the Social Insurance Law.

Competent Agency: The Public Pension Agency or the General Organization for Social Insurance, as the case may be.

Aggregation of Periods: An option granted to a contributor to aggregate his previous contribution period that he spent under the Former Law.

Prescribed Date: The date of entry into force of this Law.

Transferred Value: The value specified under Article (4) of this Law.

Actuarial Value: The current value of deferred payments to a contributor that are calculated in accordance with the actuarial tables.

1. A contributor subject to the Latter Law who has a previous contribution period during which he was subject to the Former Law may request that such period be aggregated to his contribution period under the Latter Law.

2. If a contributor returns to a job subject to the Former Law following the termination of his work subject to the Latter Law, the law governing his new job shall be also deemed as a Latter Law in the application of this Law concerning the latter period.

3. A contributor shall have the right to request aggregation of periods in accordance with the provisions of the preceding two paragraphs, even if his contribution period under the Two Laws has expired before the entry into force of this Law, provided that he meets the conditions stipulated in Article (3) of this Law.

4. This law shall not prejudice the rights acquired by a contributor (who chose aggregation) in the Former Law in case he is not entitled to a pension in accordance with the Latter Law.

1. A contributor shall not have received a lump sum settlement or pension in accordance with the Former Law for the contribution period to be aggregated.

2. The contribution period under the Former Law shall not be less than one year.

3. A contributor’s age shall not exceed 59 years upon the request of aggregation.

4. A contributor shall not be entitled to a pension under the Former Law due to disability.

5. A contributor shall express this wish by requesting aggregation of his contribution periods under the Former Law to those under the Latter Law before the termination of his service under the Latter Law .

6. The aggregated contribution periods shall not be complementary to a pension receipt entitlement period before the age of 60 under the Latter Law. A contributor shall be required to complete the period required by such Law unless the aggregation has arisen from allocation or the termination of service has been due to death, disability or discharge from service. In the event of aggregation resulting from allocation, a contributor may not receive both the retirement pension and the salary of the job covered by either the Civil and Military Pension Laws or the Social Insurance Law .

Upon the termination of a contributor’s service under the Latter Law, and he has previously indicated his wish to aggregate his contribution periods, and has been entitled to a retirement pension under the Latter Law, the actuarial value of his contribution period calculated under the Former Law shall be calculated in accordance with the Actuarial Tables no. (1, 2, & 3) annexed to this Law and the provisions attached to each, as the case may be. This value shall be calculated on the basis of the following:

1. The last salary under the Former Law, if it is the Civil or Military Pension Law, and the average contribution wage based on which the pension is calculated if it is the Social Insurance Law;

2. The period calculated under the Former Law, which is aggregated to the period calculated under the Latter Law;

3. The actuarial value referred to hereabove shall be calculated as payable to the Latter Law on the date of entitlement to receipt of pension upon the termination of service under the Latter Law. If the difference between the date of entitlement to receipt of pension and the actual date of the transfer of the value to the Latter Law is thirty days or more, the transferred value shall be

multiplied by the coefficient obtained from the annexed Table no. (4), and the result shall be the value to be transferred. The Latter Law shall present a claim to the Former Law within thirty days from the date of its knowledge of the entitlement, and the implementing regulations shall prescribe the appropriate means to prove such knowledge of entitlement.

1. Without prejudice to Paragraph (6) of Article (3) of this Law, the periods calculated under the Former Law shall be aggregated in full, and shall be counted together with the period calculated under the Latter Law as if they were all spent under the Latter Law, and the entitlements thereto shall be settled on the basis of the provisions of this law, subject to the provisions of Paragraph (2) here below.

2. If the Latter Law is the Social Insurance Law, and if it is found that the average wage on the basis of which the pension is estimated according to the provisions of the Law exceeds the last salary under the Former Law multiplied by the coefficient determined pursuant to the annexed Table no. (5), the pension due for the two periods shall be calculated as follows :

a. A pension for the contribution period spent under the Social Insurance Law shall be calculated on the basis of the average contribution wage for the last two years specified under the provisions of that law.

b. Another pension for the period calculated under the Former Law shall be calculated on the basis of the last salary under that law multiplied by the coefficient obtained from the annexed Table no. (5) and the provisions attached thereto. This pension shall be added to the pension specified in the preceding Paragraph no. (a) and the total shall be paid to the contributor as a unified pension.

Subject to the provisions of financial monitoring and financial position examination contained in the actuarial study on the basis of which the annexed actuarial tables have been prepared, appropriate means shall be identified to compensate the Two Laws for the additional costs that may be incurred by the adoption of the Law of Benefit Exchange, including the method of distribution of burdens, through an actuarial study conducted every three years.

1. The annexed Actuarial Tables and the provisions attached thereto shall be an integral part of this Law.

2. The two competent agencies shall coordinate together with regard to the exchange of information and data related to contributors and determination of the documents to be presented by the contributor and the agency to which he shall submit the application for aggregation.

3. A committee shall be formed from the General Organization for Social Insurance and the Public Pension Agency. Each agency shall be represented in the committee by three members selected by the Minister supervising the said agency, provided that they are members of the Board of Directors or senior officials. The Committee shall undertake the following competencies:

a. Applying the provisions of this Law;

b. Coordinating between the two competent agencies, whenever necessary.

c. Proposing the implementing regulations of this Law.

Each of the two competent agencies shall chair the Committee alternately through one of its representatives therein to be selected by the Minister for a period of three years. The decisions of the Committee shall be issued by majority vote. In case of a tie, the Committee Chairman's side shall prevail. The two Ministers shall agree on the person who shall chair the Committee at its first session.

4. This Law and the actuarial studies shall be reviewed in terms of the financial costs that either law may incur whenever necessary through a committee chaired by a Ministry of Labor and Social Development under-secretary and representatives of the Ministry of Finance, the Ministry of Civil Service, the Public Pension Agency and the General Organization for Social Insurance, in order to verify the suitability of this Law and the obligations arising therefrom and propose methods to address the same as well as any amendments that may be required. The review results shall be presented to the Ministry of Labor and Social Development for submission to the Council of Ministers, together with his recommendations ;

5. The Minister of Civil Service shall, in agreement with the Minister of Labor and Social Affairs, issue the Implementing Regulations of this Law within sixty days from the effective date thereof .

6. This Law shall be published and shall enter into force sixty days after the date of publication thereof.