The General Organization for Social Insurance stated: A significant increase in expenditures compared to a smaller increase in insurance revenues indicates that the number of beneficiaries and the amount of their pensions are rising at a faster rate than the number of contributors and the value of their contributions, This imposes significant future financial burdens on the Authority to meet the costs of providing these benefits to current beneficiaries and future contributors. In a statement issued yesterday, the Authority noted that expenditures on pensions, benefits, and services rose by 19 percent over the past two years, compared to slower growth in insurance revenues, which grew by 16 percent during this period. “Al-Eqtisadiah” has learned that the Fund is facing manipulation and evasion by some institutions and employers in reporting their employees“ actual wages, and that strict measures are in place to prevent late payments by suspending the establishment’s file at the Labor Office if contributions are not paid within 15 days. The institution conducts on-site inspections at business establishments, where the inspections cover all areas related to the implementation of the system and regulations, particularly ensuring that all workers are registered with their actual wages.

This comes at a time when the number of participants in the ”Social Insurance“ system has reached more than 9.6 million, and the number of establishments covered by the system stands at 441,000.

Suleiman Al-Qweiz, Governor of the General Organization for Social Insurance, said: ”The Authority currently disburses monthly pensions exceeding 1.2 billion riyals, benefiting more than 300,000 recipients. Their pensions are transferred at the beginning of the month for which they are due via the rapid transfer system directly to the bank accounts of their choice.“

He added that one of the main reasons for the disparity in the growth of benefits compared to contributions is the age of the system, as the number of retirees has increased, and the fact that the minimum wage for contributions is lower than the minimum pension amount, in addition to early retirement, which places a significant and growing financial burden on the system.

The Fund’s Governor emphasized that it is the Fund’s duty to ensure it has the necessary financial capacity to disburse benefits in the future by investing and growing contribution funds, as investment is a fundamental component of the Insurance Fund’s financing.

Al-Qweiz said, ”Contributions alone cannot meet the fund’s future obligations under any circumstances.“

He emphasized that the Authority is harnessing all its capabilities to implement the ”Social Insurance” system, noting that each of the Authority’s offices has monitoring teams comprising field staff who visit employers to ensure compliance with the system, noting that most establishments comply with the provisions of the system, which is mandatory for all establishments employing one or more workers.

He said: “The current practice of some employers evading or delaying the payment of contributions negatively affects the institution’s financial capacity, and although the late payment penalties currently imposed on those who are late in paying do not represent a significant source of revenue for the institution, but their importance lies in their role as a protective mechanism for the system to compel employers to pay contributions on time.”

The General Organization for Social Insurance had announced the suspension of the occupational hazards coverage for expatriate subscribers upon their temporary departure from Saudi Arabia, as well as the suspension of contribution payments on their behalf during their leave, and that the system would resume applying to them immediately upon their return, effective next year.

It also announced an increase in the minimum wage for contributions to the occupational hazards branch—for those not enrolled in the pension branch—to 800 riyals, up from 400 riyals for non-Saudis, and that it will not accept registration of any wage below this amount.