Kuwait’s social security scheme faces bankruptcy
Kuwait’s social security department, which operates one of the world’s most lucrative pension systems, warned last week it will go bankrupt unless the retirement laws are reformed rapidly.
The department currently has an actuarial deficit of 3.9 billion Kuwaiti dinars ($12.7 billion), which is expected to rise to KD12.7 billion ($41.3 billion) by 2015, the department’s head, Fahad Al Rajaan, told Al Qabas newspaper.
Rajaan warned that if the retirement laws were not reformed soon, the Public Institution for Social Security would go bankrupt by 2026.
Kuwaiti male government employees can currently retire at the age of 45 and claim almost 100 per cent of their last drawn salary. Women in government jobs with children in Kuwait, however, have the right to retire after just 15 years of service regardless of age and still receive full benefits.
In addition, Kuwaiti employees working in dangerous jobs can retire with full benefits after completing 20 years of service.
The institution has already presented a bill calling to increase the retirement age for women and employees in dangerous jobs to 45 years, regardless of the period spent in service. The bill requires the endorsement of the emirate’s Cabinet and 50-member Parliament, where it is certain to face opposition.
And almost 93 per cent of the Kuwaiti workforce of 221,000 have taken up their constitutional right to work in the state sector, recent reports showed.
The Institution boasted KD1.024 billion ($3.33 billion) in returns over its investments in the last three fiscal years, with last year making a record KD401.8 million ($1.3 billion), Rajaan added. – AFP
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