Bill seeks to restore yearly pension rises amid BD14.5bn funding gap
A bill to draw up to BD40 million a year from oil exports for Bahrain’s pension fund was approved by MPs yesterday, as warnings were raised over an estimated BD14.5 billion in unfunded pension liabilities.
The money would help the fund meet its financial obligations and could help bring back yearly pension rises, which were halted under a 2020 law.
A parliamentary study estimates the levy could raise BD18m to BD20m a year when oil prices exceed $40 a barrel, rising to BD37m to BD40m when they top $80.
The bill would take $1 from each exported barrel priced above $40 and up to $80, doubling to $2 above that mark. Nothing would be taken at $40 or below.
MP Eman Shuwaiter warned that earlier pension reforms had left funding gaps unresolved, citing studies that put net unfunded liabilities at around BD14.5bn.
‘Keeping these pension funds going is not simply a matter of balancing the books. It is about social security and fairness between generations,’ she said.
Shuwaiter said changes made in 2022 had already affected citizens, yet the financial shortfalls remained. She argued that part of Bahrain’s oil income should go towards paying pensions in the years ahead.
MP Mohammed Janahi warned that a funding shortfall would hurt not only pensioners but also workers and young Bahrainis yet to enter the job market.
‘It costs more to deal with a deficit than to prevent it in the first place,’ he said.
Janahi said the extra money could lessen the need to raise the retirement age, increase pension contributions or cut benefits.
He also called for strict checks on how the money is spent, greater openness in managing investments and regular actuarial reviews to keep the fund solvent.
Bahraini journalist covering politics, Parliament, government policy and public affairs
Mohamed Darwish is an experienced Bahraini journalist covering parliamentary affairs, government policy and the economy. His reporting examines legislation, political developments and the decisions affecting people across Bahrain.
