Public Pension Agency (PPA):

Introduction

       Cabinet decisions # (277) dated 30/12/1424H transferred Retirement Pension Directorate, established as a legal entity in 1378H, to Public Pension Agency (PPA). According to second article of PPA regulation issued by cabinet decision # (3) dated 3/1/1425H, PPA is a public entity characterizes by independent management, finance and budget although it is connected with chairman of BOD, H.E. the Minister of Finance. The purpose of establishing this organization is to address all retirement affairs in KSA. PPA has administered all civil and military pension schemes since the first pension regulation issued in 1364H.

First- Civil Service System:

A- Pension Eligibility:

1.  Pensioner, who reaches 60 years old, is eligible for a pension despite the length of his service.

2. The deceased's survivors or a dismissed person who is fully disabled is entitled to the greater of 40% of his final salary at the time of death or disability, whatever the length of his service, or the pension due to him based on his accrued years of actual service.

3.  A deceased or disabled person, where death or disability occurred while at work and because of it, is entitled to the greater of 80% of his final salary or the pension due to him based on his actual years of service. The dependent survivors of a civil servant, who dies on work, are entitled to the same benefits.

4.  Anyone whose service is terminated for any reason, and who has 25 years of counted service or more, is eligible for a pension.

5.  Anyone, whose service is terminated due to the abolishment of the position or dismissal by a Council of Ministers' Resolution or by a Royal Order, but not for punishment reasons, is eligible for a pension if his service reaches fifteen years at least. If the length of his service is less than this, he is eligible for lump sum payment equal to 14% of his final total annual salary multiplied by the number of service years.

6.  A pensioner, who retires at his own request and has at least twenty full years of service, is eligible for a pension based upon the length of his service, provided the approval of his employer.

7.  A retirement pension is calculated as one fortieth (1/40th) of the final salary at the end of the service as follows:

B- Lump Sum Eligibility:

Lump sum is calculated as follows:

1.  In case the service is less than ten years: basic salary x 12 x 10% x number of service years = lump sum.

2.  In case the service is more than ten years but less than twenty-five years: basic salary x 12 x 11% x number of service years = lump sum.

3.  Female worker resigning for marriage is entitled to a lump sum equivalent to 11% of last annual salary for each year of service irrespective of the service years unless she is otherwise eligible for a pension in accordance with the stipulated rules of the pension system.

Second- Military Service System:

A- Pension Eligibility:

1.•  The pension is calculated as one thirty-fifth (1/35th) of the final salary for pensioner who reaches the mandatory retirement age or who completes eighteen years of actual military service.

2.  The pension for the deceased or the discharged military personnel for health unfitness is calculated as the greater of 70% of the final salary or on the basis of accrued service years.

3.•  The pension for partial disability on work and because of it is calculated as the greater of 80% of the final salary or on the basis of accrued service years.

4.  Pension for deceased military personnel, whose death occurred on work and because of it, is calculated on the basis of the final salary received.

5.  The pension of military personnel, who has full disability by reason of military action or by being a prisoner of war, is calculated as the salary of the highest level of the rank that is immediately next to his rank. If disability is only partial, but the individual is discharged from service because of it, his pension is calculated as four fifth of his final salary.

6.  All military personnel are eligible for retirement pension once they reach the mandatory retirement age despite years of service.

B- Calculation of Lump Sum:

The accrued lump sum of a military personnel, who is discharged for non-punitive reasons, if the length of his service is less than eighteen years and he has not reached the statuary age for retirement, is calculated as one month's salary for each of the first five years, two month's salary for each of the next five years, and three month's salary for each year in excess of that. If a member of the military service is discharged for punitive reasons, and the length of his service is less than eighteen years and he has not reach the formal age for retirement, his accrued compensation is calculated as one month's salary for each of the first five years of service, and two month's salary for each year in excess of that.

Third- Disbursement Procedures/ Required Documentation:

a- Civil Service Personnel

1.  Service record, as prepared and reported by the Ministry of Civil Service.

2.  A certified copy of the ID.

3.  A clearance letter for those whose services were terminated for reasons of resignation, dismissal or absence.

4.  A proclamation of the institution through which the entitlement would be disbursed.

5.  In case the termination of service was for disability by reason of ill health, a copy of the medical report from the appropriate medical panel should be enclosed with the above mentioned documents, to determine the degree of disability.

b- Military Personnel

1.  Service record, as prepared and reported by the concerned military authorities.

2.  A certified copy of the ID.

3.  A copy of the dismissal document.

4.  A copy of the termination resolution.

5.  A proclamation of the institution through which the entitlement would be disbursed.

6.  In case of termination for ill health, a copy of the military medical panel's decision must be enclosed, along with the other required documents mentioned above.

c- Survivors

The pension of the deceased, whether his death occurred while he was in service or after he retired, is to be distributed among his eligible survivors according to the following documents:

1.  A legal inheritance document certifying the survivors' names and their relationship to the deceased.

2.  A dependency statement or legal proof (legal document or certificate), showing the names of persons who were dependent on the deceased when he was alive.

Dependency statement:

The dependency statement is an official form filled out by the person prior to his death and kept in his service file with his employer, or a certificate issued from an Islamic court certifying the names of the dependent persons. Retirement regulations stipulate that the persons whose dependency must be certified are: parents, grand parents, brothers, sisters, and grand children of the deceased's son who died during the pensioner's life.

3.  A legal document or proof certifying employment of males and females and marriage of females, whether they are survivors or dependents. Dates of marriage and employment must be shown by day, month and year.
In addition, if any person among the dependent survivors is receiving a retirement pension from someone other than the mentioned deceased person, the full name(s) of that/those deceased person(s) must be declared in writing.

4.  A certified copy of the male ID or a complete copy of their father's family record if they are added with him.

5.  If student male survivor reaches 21 years old or if he absolutely can not work, he receives a pension. He needs the following documents:

     •  A document from the school certifies that he is studying.

     •  If a survivor suffers from full disability, a medical panel's report must be enclosed.

6.  A proclamation of the institution through which the entitlement would be disbursed.

To guaranty continuity of payment, it is required in the beginning of each financial year to fill a statement by the proxy in the bank regarding social status (employment, death, marriage and divorce) and study certification of all survivors with all the required documents, otherwise, the proxy will bare all the financial amounts issued with no right. In order to facilitate issuance of pension, the eligible survivor can assign a proxy to receive his entitlement by power of attorney.

For additional details contact the agency:

Tel: +966-1-402-5100 Fax: +966-1-405-3645

Toll free: 800-124-8889

E-mail: governor@pension.gov.sa

PPA

Washim Street

P.O.Box 18364

Riyadh 11168