Experts: Gulf pensions to fall short within generation
As a result of a growing aging population, financial experts in Bahrain and other Gulf states fear that within one generation pensions will fall short of meeting the needs of all retirees.
A similar problem currently faces European countries, said Shumeet Banerji of the global management consulting firm Booz Allen Hamilton on Tuesday, reported <i>Gulf News Daily</i>.
Mortality rates have been cut in half over the past four decades, while the average life expectancy was less than around 47 in 1950 but is expected to reach more than 70 by 2010, said Banerji. Life expectancy in Bahrain, he added, already hovers at around 73.
Banerji warned that combined with a fall in fertility rates, fewer people will work to support pensioners in retirement.
"The question is not will this be a problem, but when will it be a problem," he said.
Bahrain's government has already taken steps to improve the pension system, including proposals submitted to parliament in 2004.
Bahrain's Pension Fund Commission (PFC) director-general, Rashid Al Meer, added that Arab pension plans need reforming.
"The impact of reform is very important," he said, adding, "Reform is urgently needed in the region in most Arab countries."