Saudi Arabia is preparing to launch a voluntary pension and savings program for both expatriate and domestic workers, as confirmed in a recent International Monetary Fund (IMF) Article IV Consultation report. The initiative, reported by Al-Iqtisadiya newspaper, aims to increase household savings and reduce the outflow of remittances from foreign workers, which reached 144.2 billion riyals ($38.4 billion) in 2024 alone.
The program is part of broader pension reforms approved in July 2024, which include raising the retirement age, extending contribution periods, and adjusting benefit regulations to ensure long-term financial sustainability. With 10 million expatriates among the 12.8 million subscribers to Saudi’s social insurance system, the new voluntary scheme is expected to significantly impact both domestic savings and expatriate financial security.
The IMF highlighted the scale of Saudi Arabia’s General Organization for Social Insurance (GOSI), whose assets represent 32% of the country’s GDP. The report emphasized the need for transparent financial disclosure and clear allocation rules to strengthen the system further and maximize its effectiveness.
By offering a structured savings avenue for foreign workers, Saudi Arabia aims to retain more capital within its economy while providing better long-term financial stability for its diverse workforce. This move aligns with the Kingdom’s goals to enhance economic resilience, support workforce welfare, and reduce dependency on remittance outflows.
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