Full amalgamation will increase contribution
The merging of the Pension Fund and the General Organisation for Social Insurance will be only in administrative matters as unifying the privileges of the two organisations would increase the monthly subscriptions by 10 per cent, Pension Fund general director Rashid Al Meer has said.
Al Meer told the Tribune that the complete merger of the Pension Fund and the Gosi would cost subscribers, employers and the government about BD54 million annually because of the increase in the deductions.
The savings of employees of both private and public sectors are made from fixed monthly deductions from salaries as well as the contribution by the government, he said.
The merger was planned years ago to enhance their financial abilities as one organisation. The Cabinet has given a go-ahead. Both organisations would merge and the new entity will be called Social Insurance General Organisation which will have financial and administrative autonomy.
Al Meer said the new entity would have a board of directors comprising representatives from government and the private sector as well as financial and insurance experts who would work under the supervision of the Minister of Finance. The board would formulate policies and set up a company to invest the savings of the new organisation.
He said the Cabinet had referred to the legislative authority the draft law on the new organisation. The merger aims to safeguard the two organisations from bankruptcy in future and prevent a repetition of current financial difficulties.
A spokesperson of the Bahrain General Federation of Trade Unions, Jaffar Khalil, opposed the merger of administrative affairs. He said the privileges for workers of the private and public sectors should be standardised so that all subscribers are on par and treated equally. He said public sector employees get better services and facilities, including a low monthly deduction, than their private sector counterparts.
By Suad Hamada, Staff Reporter
© Bahrain Tribune 2006
