New GOSI Regulations

1. New GOSI Regulations

2. Introduction • His Majesty, Custodian of the Two Holy Mosques approved new GOSI regulations on Nov 13, 2000 • We will discuss the major changes under the new regulations

3. Topics of Discussion • Compensation Features • Contribution Features • Buyout Option • New Employment After Retirement • Miscellaneous

4. Compensation Features • An employee shall be eligible for retirement compensation from GOSI after having contributed 300 months (25 years) regardless of age

5. Compensation Featurescont’d • A new formula will be based on 2.5% of the wage x years of contribution to GOSI • This will be applicable for years of contribution effective commencement of new regulations • Past years will be calculated based on the existing formula

6. Compensation Featurescont’d • No allowance for dependents under new GOSI regulations • For years of contribution made under existing regulations, allowance will be incorporated into a retiree’s compensation

7. Compensation Featurescont’d • The minimum monthly compensation from GOSI shall be SR 1,500 • Industrial permanent total disability (PTD) benefits will be increased from 75% of wage to 100% • Non-Industrial permanent total disability (PTD) benefits will increase from 40% of wage to 50%

8. Contribution Features • Contribution to GOSI per employee shall be 18% • 9% by employee and 9% by employer • Contribution on part of employee will be gradually increased • 6% first year, 7.5% second year, 9% every year afterwards • Employer will pay 9% immediately upon implementation of new regulations

9. Contribution Featurescont’d • Maximum cap of SR 45,000 on which GOSI contributions will be made • Increment of wages above SR 45,000 will not be part of contribution and thus will not be part of GOSI calculation for pension • For past years where there was no cap, GOSI will figure these amounts based on existing formula and years of contribution made on these amounts using the wage before transition

10. Contribution Featurescont’d • No Cap on Housing Allowance • In the existing regulations there is a cap of SR36,000 • The overall cap of SR 45,000 on total wages will be the controlling factor

11. Buyout Option • If aged 60 Hijirah years and have not completed minimum ten years contribution there is option of buyout • Maximum amount of five years that can be bought out in order to bring employee up to ten year requirement • Employee must pay 18% of wage (employee’s and employer’s share) of wages for each year needed to be bought

12. Buyout Optioncont’d • Employees who left under the Permanent Total Disability (PTD) program and heirs of deceased employees will be given buyout option • As before, maximum amount of five years that can be bought out in order to result in ten year minimum requirement and 18% per year to be bought

13. New Employment After Retirement • For those retirees below age of 60 Hijirah years who take on new employment, GOSI pension will be stopped and new calculation will be made after their final retirement to include years of contribution under new employment

14. New Employment After Retirementcont’d • For those retirees between the ages of 60 and 65 Hijirah years who take on new employment, they will be given option of participating in GOSI • If they participate, a new calculation will be made at the end of their final retirement to take into consideration the additional years of contribution • GOSI will provide difference if new salary is less than previous GOSI compensation

15. New Employment After Retirement cont’d • For those retirees above the age of 65 Hijirah years, any new employment will fall outside the GOSI scheme

16. Miscellaneous • After the age of 50 Hijirah years, there will be a restriction of a maximum increase of 10% of wages per annum that will be calculated for compensation for total years of contribution • Any amount over the 10% maximum increase will still be contributed on and will be calculated into the compensation for only the specific years they were contributed on

17. Miscellaneouscont’d • Under the existing regulations, a deceased retiree’s female heir receives a marriage grant of 18 multiplied by her monthly share and will not receive compensation if divorced or widowed • Under the new regulations, there still is a lump sum grant. However if divorced or widowed GOSI payments resume

18. Miscellaneouscont’d • Females may become eligible for retirement compensation earlier if they have contributed at least 120 months (10 years) to GOSI and are at least 55 Hijirah years of age

19. Miscellaneouscont’d • Males working in hazardous conditions may become eligible for retirement compensation after 120 months (10 years) contribution to GOSI. Minimum age requirement in this case will be 55 Hijirah years • Minimum number of years in hazardous conditions must be five • GOSI has published an approved list of hazardous environments/jobs

20. Miscellaneouscont’d • The maximum possible amount of monthly compensation from GOSI shall be equal to 100% of an employee’s monthly wage. • An employee who contributes more than 40 years will not receive more than 2.5% of wage multiplied by 40 years or 100% of the wage

21. New GOSI Regulations • The new regulations will take effect on April 01, 2001 Thank You