Civil Pension Law

The following terms, wherever mentioned in this Law, shall have the meanings assigned thereto:

Employee: A person engaged with the State or with public authorities in a permanent relationship governed by law; this term shall include an employee and servant, as well as ministers and their deputies and employees of the excellent grade.

Public Agency: An administrative person with a separate financial liability; this term shall include public institutions and municipalities and any institution whose statute stipulates that its employees be subject to the Civil Pension Law.

Board of Directors: The Board of Directors of the Civil Pension Fund.

Fund: The Civil Pension Fund.

Agency: The Public Pension Agency .

Retiree: An employee whose service has ended

Pension: A monthly amount paid to a retiree or his beneficiaries under this Law.

Lump Sum Settlement: A one-time lump sum disbursed to a retiree under this Law.

Pensioner: A retiree for whom a pension is decided under this Law; the term shall include an employee who died and to whom a pension has been decided under this Law.

Beneficiary: A person for whom a pension is decided for being next of kin to a pensioner.

The terms used in these definitions shall be interpreted according to the meanings assigned thereto in this Article. Besides, the masculine term shall include the feminine, and the singular shall include the plural, unless the context requires otherwise.

The provisions of this Law shall apply to all Saudi civil servants appointed to grades in the State's general budget or budgets of public authorities. However, if an employee occupies more than one of these grades, the provisions of this Law shall not apply to him, except for a position with a higher salary.

The provisions of this Law shall not apply to a person occupying the position of “minister” who is granted a monthly allocation for occupying such position, except if he chooses to assign the monthly allocation in return for enjoying the benefits of this Law .

The Fund shall have an independent financial liability, and shall be managed, pursuant to the provisions of this Law, by the Public Pension Agency, which is an independent authority financed by the Fund. The said Agency shall report administratively to the Ministry of Finance and National Economy, and its fiscal year shall be the same as that of the State. The Council of Ministers may, by its resolution, assign the said Agency to implement any other pension law .

Except for the management of the Fund’s investments, the Public Pension Agency shall be subject to the Civil Service Law and the Law of Employees, as well as the financial laws in force in the Kingdom. The Minister of Finance and National Economy shall, in the implementation of these laws, have the powers prescribed for the Minister. The Agency shall be headed by a Director General; his deputy shall assist him in his presence and replace him in his absence. The rank of the Director General and his deputy shall be determined by a Council of Ministers Resolution based on a proposal of the Minister of Finance and National Economy.

The Board of Directors shall be composed as follows :

• Minister of Finance and National Economy, or his designee Chairman

• President of the Public Personnel Bureau. Member

• The Governor of the Saudi Arabian Monetary Authority. Member

• Director General of the Public Pension Agency. Member

• Two specialized members, one in management and the other in economics. Members

The Board of Directors shall convene at the invitation of its Chairman as the need arises; its meeting shall not be valid unless attended by the majority of its members, and decisions shall be issued by the majority of the attending members, and in case of a tie, the Chairman's side shall prevail.

The Board of Directors shall manage the Fund and supervise the Agency; it shall particularly assume the following powers:

1. Supervise the implementation of this Law and issue the Implementing Regulations thereof;

2. Set a general plan for and manage the investments of the Fund, and issue the rules required to implement the same;

3. Approve the annual budget of the Agency in preparation for issuance thereof, in accordance with the Law.

4. Appoint one or more account auditing firms to carry out the auditing work of the Agency according to the accepted rules, and determine its remuneration;

5. Approve the final account of the Agency for submission thereof to the Council of Ministers for approval.

The Director General of the Agency shall be accountable to the Board of Directors for the progress of work therein. The Board of Directors shall determine its powers regarding the administration of the Agency and the investment of the funds of the Fund.

The financial position of the Fund shall be examined once every three years by an actuarial expert or a specialized institution in this field, as of the effective date of this Law. Such examination shall estimate the present and future obligations of the Fund and the extent of balance between the benefits granted to the beneficiaries of the Fund and its potentials.

The examination shall also include an estimation of the revenues and expenditures in the period following the preparation of the examination report, as determined by the Board of Directors. The Board of Directors shall study the report and afterwards submit the same to the Council of Ministers, together with its observations and suggestions.

In case of a deficit in the Fund, it shall be settled according to the method determined by the Board of Directors and approved by the Council of Ministers, but if there is a surplus that makes it possible to introduce new benefits to the beneficiaries, this may be decided upon by a recommendation of the Board of Directors and approval of the Council of Ministers.

The Public Pension Agency shall only be committed by the pensions and pension benefits payable in accordance with the provisions of this Law and the two Pension Laws of 1378H and 1381H. As for the pensions and compensations payable under other laws preceding these laws, they shall be borne by the Ministry of Finance and National Economy or the Public Agency, as the case may be.

The rights and obligations of the Law promulgated by Royal Decree no. (6), dated 19/2/1381H shall be transferred to this Law. The pensions payable under the existing civil pension laws shall be increased upon the entry into force of this Law, according to the following:

- For the pensioner, the first (300) riyals of his pension shall be increased by (30%), the second (300) riyals by (20%), and the rest by (10%);

- For the total benefits for the pensioner, the first (200) riyals shall be increased by (70%), the second (200) riyals by (50%), and the rest by (30%).

However, such increase shall not result in the pension or the total benefits for the pensioner exceed (2,000) riyals .

The Agency may at any time refer a person who has not reached the age of fifty and who receives a pension due to incapacitation, pursuant to this Law or to any previous pension law, to a physician appointed by the Agency to examine him at his place of residence or at any other place specified for him. If the said person fails to appear at the specified time and place for the medical examination, despite notifying him with a registered letter, his pension shall be suspended until he attends such medical examination. If he again continues to decline the examination within one month from the date of suspending his pension, he shall be notified once more in the same way. If he refrains from attending the medical examination for one year from the date of the second notification, or if the examination proves his recovery, his condition shall be re-settled on the basis of his entitlements in case of discharge from the service; however, the pension shall be completely suspended for the person who declines the medical examination if he is a beneficiary of the pensioner.

An amount of (9%) of the salary of an employee who is subject to this Law shall be deducted on a monthly basis. The Ministry of Finance or the Public Agency shall also pay an equal share to that of the employee. The share paid by the Government or the Public Agency may be increased by a decision of the Council of Ministers upon the proposal of the Minister of Finance and National Economy, if the Agency finds that such amounts are not sufficient to meet its obligations.

The Board of Directors shall, by its decision, issue the procedures to be applied in the repayment of the deductions and the equal share .

The deductions as well as the share shall be calculated on the basis of the entire basic salary and without any additions thereto.

An employee shall be referred to retirement inevitably upon reaching the age of sixty. However, his service may be extended till the age of 65 only by a decision of the Council of Ministers, but this extension shall not apply to ministers and judges. In exceptional cases, the service period may be extended till after the age of 65 by a Royal Decree.

The service period to be calculated in his contributory service shall refer to the actual periods spent in one of the jobs stipulated in Article (2) hereof or jobs whose incumbents are subject to the previous pension laws, after excluding the following periods:

a. An employee’s period of absence without leave and periods of leave without pay, except for sick and study leaves;

b. Periods of suspension from work where an employee is deprived of his salary;

c. Fractions of a month in the service period.

The periods of secondment and study leave without pay shall be counted within the periods calculated in his contributory service and the deductions due for such periods shall be paid on the basis of the entire salary of the original job, and shall be paid by the seconded employee on a monthly basis. If such employee fails to repay the deductions due for a certain period, the Board of Directors may decide not to calculate such period in the retirement period. An employee on a study leave shall pay the same after his return to service in a job subject to this Law either in one payment or in monthly installments over a period not exceeding the period of study leave. The Agency may collect these installments in case of the employee’s service termination before the fulfillment thereof from the lump sum settlement in one payment or from the pension to which he or his beneficiaries are entitled in monthly installments at an amount of (25%) of the pension or the total pensions of the beneficiaries. If the employee on leave does not return to service in a job subject to this Law for a reason due to him, the study leave shall not be counted in his service period for the purposes of retirement.

1. An employee shall be entitled to a pension at the end of his service, provided that his contributory service has reached (25) years at least, or his civil and military contributory service has reached 25 years at least. An employee may request referral to retirement and receive a pension after the expiration of a contributory service period of not less than twenty years, as calculated in the pension laws, provided that such referral is approved by the competent agency entitled to appoint his likes. However, if the termination of service is due to cancellation of the job or dismissal by a decision of the Council of Ministers or by a High Order, unless the dismissal is based on disciplinary reasons, the employee shall be entitled to a pension whenever the period of his contributory service reaches at least (15) years. An employee whose service is terminated due to his death, disability, or reaching the age of retirement, shall be entitled to a pension, regardless of the period of his service .

2. If the entire length of both the civil and military service does not reach the period for which an employee is entitled to a pension in accordance with the Civil Pension Law, the lump sum settlement for his military service shall be settled pursuant to the Military Pension Law in force upon the expiry of his latter service, and the sum of the two lump sum settlements shall be disbursed from the Civil Pension Fund. &

Subject to the provisions of the different cases stipulated in this Law, the pension shall be settled for a service period by one fortieth of the last monthly salary for each year of contributory service, provided that the entire period does not exceed 40 years .

The pension of a deceased employee or one discharged from service due to his total incapacitation shall be settled on the basis of (40%) of his last monthly salary or the pension payable for his contributory service period, in accordance with Article (19), whichever is greater.

The pension of a deceased employee or one discharged from service due to his total incapacitation, if the death or disability occurred due to or during the performance of his duties, shall be settled on the basis of 4/5 of his last monthly salary. Workplace injuries shall include those occurring during an employee’s journey to or from his workplace or working area and for the purpose of performing his duties.

In the event of the expiry of the service period of minister, a member of in the Council of Ministers, his pension shall be settled according to one of the two following methods, whichever is better for him:

1. A pension equal to (25%) of his salary in the position of a minister, shall be fixed for the minister, regardless of his service period therein; no matter how frequently he occupies the same position, a pension shall be added to such pension for any contributory service period served in a position other than that of a minister, to be calculated at one fortieth (1/40) of the average monthly salary in the last two years of such period.

2. His pension shall be settled for the total of his contributory services, including his service in the position of a minister, according to the Articles (19), (20) or (21). In no case may the pension of a minister exceed four fifths (4/5) of his salary in the position of a minister.

With the exception of the cases stipulated in the previous articles, if an employee’s service expires, he shall not be entitled to a pension, but to a lump sum settlement calculated on the basis of (14%) of the annual salary for each year of his service period referred to herein. However, if he leaves the service because of resignation or dismissal for a disciplinary reason, the lump sum settlement shall be calculated according to the following percentages:

- (10%) of the annual salary for each year of contributory service, if his service period is less than ten years;

- (11%) of the annual salary for each year of contributory service, if his service period has reached ten years but has not amounted to the period for which he shall be entitled to a pension. However, female employees who resign due to marriage shall be entitled to a lump sum settlement that is calculated on the basis of (11%) of the annual salary for each year of service period, regardless of such period.

- If the service period of an employee has not reached the amount for which he shall be entitled to a pension; the annual salary shall mean the last monthly salary that the employee has been entitled to multiplied by twelve (12).

If a pensioner dies, his beneficiaries shall be entitled to the full amount of his pension, in case they are three or more; in case of two beneficiaries, they shall be entitled to ¾ of the pension amount; and in case of one beneficiary, he shall be entitled to half the amount of the pension. The pension shall be equally distributed to all beneficiaries.

The beneficiaries of the pensioner shall include:

Husband, wife, mother, father, son, daughter, son and daughter of a son who died during the pensioner’s life, brother, sister, grandfather, and grandmother. With the exception of the wife, son, and daughter, in order for a person to be entitled to the pension, he shall be dependent on the pensioner upon his death. The Board of Directors shall, by its decision, determine when to consider a person as dependent on the pensioner and the procedures required to prove the same.

The pension to which male children, grandchildren and brothers shall be suspended if they reach the age of twenty-one. Notwithstanding the aforementioned, the pension shall continue for such beneficiaries as under the following conditions:

1. If the beneficiary is a student at a secondary or high school or any recognized equivalent thereof, provided that he is a regular student; the pension shall be disbursed to him until he reaches the age of twenty-six or until graduation, whichever is earlier.

2. If he suffers from a total disability preventing him from earning his living, and this is established by a decision of the competent medical agency, until the disability is removed.

The pension payable to a wife, daughter, granddaughter and sister shall be suspended upon their marriage, as of the date of the marriage contract; the same shall apply to the mother if she marries other than the father of the deceased. Such pension entitlement shall be recovered if the beneficiary is divorced or widowed; if the divorced female beneficiary was married at the time of the pensioner’s death, the pension shall be redistributed on the assumption that she was entitled thereto at the time of death.

The pension disbursed to a pensioner or his beneficiaries shall be suspended if he is/they are appointed at steady government positions or if they were appointed therein upon the death of the pensioner, provided that the employee’s salary is equivalent to or exceeds the amount of the pension. If the salary is less than the pension to which he is entitled, the difference shall be disbursed to him. This beneficiary may receive both the pension he is entitled to and his monthly salary together if their total does not exceed (400) riyals, but if such total exceeds this amount, the pension shall be reduced by the amount of such increase.

No beneficiary may receive more than one pension. If a person is entitled to more than one pension according to this Law or other pension laws, the larger pension shall be disbursed to him. However, he may receive two or more pensions together if their total does not exceed (300) riyals per month, but if such total exceeds this amount, the last pension shall be disbursed by the amount that completes the said total.

These provisions shall apply to a pensioner who is a beneficiary of another pensioner.

If the share of one beneficiary is withdrawn or suspended for any reason whatsoever, it shall not be disbursed to the remaining beneficiaries; it shall be returned to the Fund, provided that the share of the remaining beneficiaries be, in all cases, not less than (50%) of such pension, but if such share becomes less than (50%) of the pension, it shall be increased by the amount of such percentage and shall be redistributed to the remaining beneficiaries by their number. If the suspended beneficiary's share is recovered, the pension shall be redistributed to the existing beneficiaries, as if that share had not been suspended.

Without prejudice to the provisions of Article (28), if a pensioner is returned to service in a job whose incumbent is subject to the provisions of this Law, his retirement pension shall be suspended throughout his service period, and upon the expiration of his latter service period, his pension shall be settled on the basis of either of the two following methods, whichever is better for him

1. The pension shall be settled on the basis of the sum of a pensioner’s former and latter service periods.

2. The pension shall be settled for the latter period of service, regardless of the duration of such service, in accordance with the provisions of this Law, in addition to the pension that he used to receive before returning to service. However, if he was entitled to the previous pension under another law other than the Civil Pension Law, then the pensioner shall be treated, upon the expiry of his service that is under the Civil Pension Law, in accordance with the latter method.

If an employee is returned to service in a job subject to the provisions of this Law and he has previously received compensation, lump sum settlement or retirement benefits under previous laws or has received a lump sum settlement for a previous service period under this Law, such period may be counted in his contributory service, provided that he applies for the same within a period not exceeding one year from the date of his return to service. In this case, he shall return the compensation, lump sum settlement, or benefits that he received for the period to be calculated either in one payment not later than six months from the date of submitting the application or in equal monthly installments to be deducted from his salary for a period equal to the period to be calculated or to the period remaining for him to reach the age of retirement, whichever is earlier. The deduction of installments from the salary shall start as of the date determined by the Agency. In the event of service expiry before these installments are completed, the Agency shall be entitled to obtain the same from the employee’s pension. If this employee becomes entitled to a lump sum settlement, the remaining installments shall be deducted therefrom at one time. In the event of the death of an employee or pensioner, the Agency may not claim the amount of such installments from his heirs or beneficiaries.

The Ministry of Finance and National Economy or public authorities shall pay, as the case may be, a percentage of the salaries for employees on the job at the effective date of this Law upon the implementation of the provisions stipulated in (Chapter Three) of the Civil Pension Law issued in 1381H, for their service period prior to the entry into force of this Law; this percentage shall amount to (9%) for employees not covered by the Civil Pension Law for the year 1381H, and (6%) for employees covered thereby. This percentage shall be paid in the manner prescribed by the Minister of Finance and National Economy.

The previous provision shall apply to Hors-cadre staff members or employees who were appointed before effective date of this Law in positions subject to (Chapter Two) of the Civil Pension Law of 1381H, if they are still in service when this Law enters into force.

The age of a retiree or beneficiary entitled to a pension shall be determined based on the data contained in his birth certificate or identification card. In the event that the birth date is not specified in days and months, it shall be considered to have occurred on the first day of the seventh month of the Hijri year in which he was born.

A retiree shall be entitled to a pension as of the day following the expiry of his service, and his beneficiaries shall be entitled to the same from the day following his death.

If, after the effective date of this Law, a pensioner dies and he was entitled to such pension before the entry into force of this Law, then his beneficiaries shall be treated in accordance with the provisions of this Law.

 

A pension may not be attached except by an amount of (25%) thereof and pursuant to the order of the President of the Council of Ministers, if the attachment is related to government debts, or pursuant to a judicial ruling, if it is related to other than government debts. In all cases, an alimony debt shall be given precedence over other debts .

A pensioner or beneficiary thereof shall be deprived of a pension in following cases:

1. If he obtains a nationality other than his Saudi nationality;

2. If he serves in a foreign government or organization without official permission.

Such provision shall not apply to a non-Saudi wife or a wife who recovers her non-Saudi nationality due to the death of her husband.

Any person who intentionally presents incorrect data or has deliberately refrained from presenting the data required for this Law or its Implementing Regulations, resulting in obtaining funds from the Fund without right, or has, with bad intention, caused the same, whether he or others shall be beneficiary, and whether he is an employee or not; shall be punished with a fine not exceeding the amounts illegally obtained, without prejudice to any other penalty stipulated in other laws, and without prejudice to the Fund's right to recover the amounts unlawfully obtained.