NEW reforms to extend the lifespan of pension funds beyond 2034 are on the way, it has been announced.Finance and National Economy Minister Shaikh Salman bin Khalifa Al Khalifa, who is also Social Insurance Organisation (SIO) board chairman, told MPs during their weekly session yesterday that urgent reforms carried out in 2022 rescued the civil pension fund which was at the risk of going bankrupt this year.

He said an actuarial study was near completion, after which recommended reforms would be put on the table for legislators to decide on.“There are huge challenges which call for huge reforms, and we need Parliament’s help on this.“There was an opportunity to extend the civil pension fund up to 2086, but Parliament didn’t go with us on this, so we managed to buy just 10 years of additional time,” added Shaikh Salman.“MPs are focusing on investments alone, ignoring other aspects that need to be considered for a comprehensive solution to the issue.”Speaking on SIO losses and the welfare of pensioners, he said protecting pension funds for both the sectors was a government priority.

“Parliament probes in 2003, 2017 and 2020 helped us correct the course of both the funds,” he said.“We are working to further reduce deficits and losses, achieve fiscal balance, and then go into generating surplus before directing it to annual pension pay rises.”An agitated Parliament financial and economic affairs committee vice-chairwoman Eman Shuwaiter said that what’s currently happening with the pension funds is a crime as employees receive lucrative wages, incentives, allowances and bonuses besides other benefits for themselves and their families.However, her remarks were struck from the records following objections by acting Parliament and Shura Council Affairs Minister and Labour Minister Jameel Humaidan.Acting Parliament Speaker Abdulnabi Salman presented Shaikh Salman with copies of earlier financial studies that he claimed the former SIO board refused to accept.National Strategic Thinking Bloc spokesman Khalid Bu Onk said the annual SIO spending on employees and building rent was BD14 million which could easily finance the abandoned 3pc annual pension rise.

“Shortly, the books of the SIO will be open to MPs to monitor and scrutinise and there is nothing to hide,” said Shaikh Salman.SIO official Abdulla Kamal said average profits made by Asool Assets Management since it was set up were 6.1 per cent over the years.However, it incurred losses in 2022, which was an international trend at the time.“The Norwegian Pension Fund showed -14pc and the Swedish Pension Fund showed -11pc,” he said.“The 2023 statistics, however, showed recovery with investments making an estimate 4.2pc net profit and this will be presented to legislators in the closing financial statement they are set to receive after auditing.“As for the BD17m lost from alternative investments, it was 0.5pc of the total investments, and it was high risk and we alerted MPs about it at the time, which was in 2021.”SIO chief executive Eman Al Murbati said the BD230m taken from the Unemployment Fund in 2019 for the early retirement scheme only saw BD170m, while the rest was pumped into pension coffers.

Meanwhile, MPs rejected an urgent proposal by five MPs to have the indemnities of expat workers collected from employers at the end of the work contract rather than monthly.J MPs unanimously approved an urgent proposal to issue a statement on Bahrain Diplomatic Day, marked on January 14, and deputised Mr Salman to issue it on their behalf.mohammed@gdnmedia.bh

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