The Gulf States of the Middle East are considering a change in the retirement age along with a review of employee benefits and pension contributions. This has been prompted by recent analysis of the pension funds in these countries, which are low in general with respect to populations compared with those of Western Europe, with the exception of Kuwait which has a sizeable fund. Saudi Arabia has the largest pension funds but its large population means that these funds will be thinly spread.
The Gulf Governments are reviewing domestic and international pension funds to ensure that they are viable. The comparison with UK pension funds shows that the UK pension funds have 4 times the assets of the UAE equivalents. This is likely to bring about significant changes in retirement age, benefits and contributions.
Two major considerations are shaping thought on this matter. The first and most urgent being that the Gulf pensions are deficient with respect to assets, demographics, contributions and benefits. The second concern relates to expatriates with growing employer recognition that the End Of Service Benefits (EOSB) paid to expatriate employees is neither adequate or a suitable alternative to a pension.
The healthcare sector has created the lead in private investment with the influx of private healthcare insurance to the region. The pensions sector may follow this with greater contributions of private pensions. It is expected that there will be changes to the retirement age in the Gulf States along with some ammendments to the EOSB for the expat workers. Watch closely for further developments.