Benefits transfer between PPA & GOSI
Introduction:
There are three pension schemes in KSA: civil pension scheme issued by Royal Decree # M/41 dated 29/07/1393H, military pension scheme issued by Royal Decree # M/24 dated 05/04/1395H and GOSI scheme issued by Royal Decree # M/33 dated 03/09/1421H. There is integration between civil and military schemes. Thus, services can be transferred between the two schemes while this does not apply for GOSI. This limits the mobility of workers.
Benefits Transfer Agreement issued by Royal Decree # M/53 dated 03/07/1424H handle this issue. This is a true evidence of The Custodian of The two Holy Mosques Government care for people.
Minister of Finance resolution # 2482 dated 21/10/1424H agreed on the executive regulation of the Agreement. The Agreement was valid as of 01/11/1424H.
PPA is pleased to present a clear explanation for the rules of The Agreement.
Purpose:
1- To organize periods integration and keep the rights of employees in the two sectors by transferring periods of contribution when moving from one sector to another to the last scheme in order to be illegible to receive a pension or increase the pension amount.
2- To facilitate mobility between private and public sectors.
3- To exchange experiences between sectors.
4- To increase Saudisation level in private sector.
5- To support government trend to privatize some public agencies and to participate in national plans successfully.
Beneficiaries:
1- Addition of contribution periods is optional.
2- the Agreement allows for every contributor has a GOSI covered periods of service or vice versa to add last periods to the scheme that covers final period.
3- Pensioner that his/her contribution periods under the two schemes ended before The Agreement takes effect can benefit from The Agreement.
4- The Agreement assures that contributor can move from one sector to another more than one time freely. He still can add all periods of service. The last scheme he joins is the scheme that is applicable.
Terms & Conditions:
The contributor who moves from work covered by PPA to work covered by GOSI or vice versa has the right to request addition of period calculated for him by first scheme to the period calculated for him by second scheme according to the following terms:
1- For active workers or contributors who leave work before 01/11/1424H, they should submit requests during two years after 01/11/1424H. For contributors who joins work after 01/11/1424H, two years from enrolment.
2- The contributor should not receive a lump sum or pension for that period.
3- The period should not be less than 1 year.
4- The contributor should not exceeds 59 years old when request the addition except for contributors who leaves the work covered by the two schemes before the specified date and contributors who are still active and covered by the last scheme at the specified date.
5- The pension in the first scheme should not be paid because of disability.
6- The contribution periods added should not be added periods to earn pension before reach 60 years old under the last scheme. The contributor should complete the period required by the scheme except for death, disability or dismissal.
Required Documents:
The contributor shall send addition request to the first scheme by "addition request form 1" according to the following:
1- The request should be sent to PPA if the period is covered by PPA. He should present ID copy and contribution period statement or dismissal resolution from Civil Service Dept. or dismissal resolution from military service.
2- The request should be sent to GOSI if the period is covered by GOSI. He should present a copy of appointment resolution and a statement certifies that he is still active. For contributors who leave service, they should mention that in the addition request.
The contributor can submit his request by the following methods:
• By hand to the scheme covering first period or any branch.
• By employer.
• By registered mail
The request should be received by first scheme before ending of the required period to apply the agreement.
Does the Agreement allow contribution periods addition for the purpose of early retirement?
The Agreement do not allow contribution periods addition for the purpose of early retirement except for death, disability, dismissal or completing the period required to receive a pension under the last scheme.
Abstention from the addition of contribution periods:
The agreement guarantee abstention from the addition of contribution periods for the contributor if this is for his interest. He should request abstention according to the following:
1- Send abstention request before ending of contribution periods under the last scheme
2- The request should be sent to the last scheme authority.
Settlement of pension resulted from adding periods of contribution:
The settlement is calculated on the bases of full contribution periods in the two schemes according to the following:
1- If PPA scheme is the last one: pension is settled by calculating all periods within the two schemes according to PPA law and depending on the last basic salary.
2- If GOSI scheme is the last one: pension is settled by calculating all periods within the two schemes according to GOSI law and depending on the average salary of the last two years provided that the average does not exceed the last salary of the first scheme multiplied by the special factor according to actuarial table # 5 attached to the agreement. In this case the pension is calculated as the following:
a- The pension is calculated for contribution period under GOSI according to average salary of the last two years.
b- Another pension is calculated for contribution period under PPA depending on the last basic salary multiplied by the special factor according to actuarial table # 5 attached to the agreement.
This pension is added to the pension specified in clause (a). The two pensions are paid as one pension.
Examples:
• If civil scheme is the last one:
Contribution period under GOSI: 6 years
Contribution period under civil scheme: 30 years
The last salary under civil scheme: SR 12000
Pension: 6+30×12000/40= SR 10800
• If military scheme is the last one:
Contribution period under GOSI: 5 years
Contribution period under military scheme: 20 years
The last salary under military scheme: SR 7744
Pension: 5+20×7744/35= SR 5531.43
• If GOSI scheme is the last one:
Contribution period under GOSI: 15 years
Contribution period under civil scheme: 6 years
The last salary under civil scheme: SR 7000
average salary of the last two years under GOSI 14000
In this case the average salary of the last two years under GOSI= SR14000 which exceeds multiplying the last basic salary by the special factor according to actuarial table # 5= 7000×1.80094=12606.58> SR14000
According to this two pensions will be paid to him:
a- pension for Contribution period under civil scheme:
7000×6×1.80094/40= SR 1890.99
b- pension for Contribution period under GOSI scheme:
14000×15/40 = SR5250
Total of Pensions: 1890.99+5250= SR7140.99
The actuarial value should be transferred:
There is no liability beard by contributor for addition of services. This will be between PPA & GOSI.
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