The General Pension and Social Security Authority said that the contributions that are paid monthly to the Authority on behalf of the insured / contributor / by the employers are calculated according to the salary of the subscription calculation, and the insurance rights that include the retirement salary or end-of-service gratuity, are disbursed on the basis of the "average contribution calculation salary".
In detail, Muhammad Saqr Al Hammadi, Director of the Pension Operations Department, said that the insured's knowledge of the contribution account salary shows him the value of the contributions that are paid on his behalf monthly to the Authority, as well as the value of the retirement pension that will be paid to him at the end of his service, or the value of the end-of-service gratuity in the event that it is not available Conditions for entitlement to pension/retirement salary/.
He added that the first step towards the method of calculating the retirement salary or the end-of-service benefit is for the insured to know the difference between the total salary, the contribution calculation salary, and the average contribution calculation salary, leading to knowing the pension calculation salary (retirement salary) that he will receive or the end-of-service gratuity upon the end of his service. .
Al Hammadi indicated that the total salary is all that the insured receives at the end of each month from his employer, while the salary for the subscription account in the government sector consists of elements that include the basic salary in addition to the monthly allowances and allowances set by the Pensions Law at the cost of living allowance, the social allowance for children and the social allowance for the citizen The housing allowance, with a maximum of 300,000 dirhams, while in the private sector, the salary of the subscription calculation includes everything stipulated in the work contract, with a maximum of 50,000 dirhams. His insurance entitlements at the end of his service.
He explained that the average salary of the subscription calculation is the sum of the salary of the subscription calculation of the insured in the government sector for the last three years of work divided by 36 months, and in the private sector, the sum of the last five years of work divided by 60 months, or on the contribution period in both cases if the service period is less about it.
And he continued: "For example, if the salary of the subscription calculation for an insured in the government sector for the last three years of work is 10 thousand dirhams, then 15 thousand dirhams, then 20 thousand dirhams, then the product of 10,000 x 12 months = 120,000, and the product of 15,000 x 12 months = 180,000, and the product is 20,000 x 12 months = 240,000, and by summing these elements 120,000 + 180,000 + 240,000 = 540,000 dirhams, and then dividing 540,000 dirhams by 36 months = 15,000 dirhams, and this is the average salary for the subscription calculation, and the same calculation method is applied in the sector private, but on the average salary of the subscription calculation for the last five years of work.
Al Hammadi clarified that the pension calculation salary (retirement salary) is calculated based on the average contribution calculation salary multiplied by the eligibility ratio according to the years of service, as 15 years of service for the insured gives the pension 60% of the average contribution salary as a retirement pension, while 20 years of service are granted The pension is 70%, and this percentage increases by 2% for each additional year spent by the insured after 20 years of service in order to reach the maximum pension, i.e. 100%, after spending 35 years of service.
According to the previous example, the value of the retirement pension for a person who has spent 20 years of service and the average salary for calculating his contribution will be 15,000 dirhams, according to an equation in which 15,000 x 70% = 10,500 dirhams is multiplied, and this is the pension salary of the insured for this period after calculating the average salary for calculating his contribution.
In the event that the insured is entitled to an end-of-service gratuity, it is calculated on the basis of the average salary of the contribution calculation after extracting it in the same previous method, bearing in mind that the insured’s remuneration is calculated at the rate of a month and a half salary from the “average” for each year of service from one to five years. A salary of two months for every year from five to ten years, and a salary of three months for every year exceeding ten years.
According to the previous example, if an insured person spent thirteen years in service, the reward for the first five years will be calculated according to the formula 15,000 dirhams / average salary of the subscription calculation / x 1.5 / month and a half / x 5 / years / = 112,500 dirhams, while the following five years are calculated According to the equation 15,000 dirhams x 2 / two months / x 5 / years / = 150,000 dirhams, and the remaining three years are calculated according to the equation 15,000 dirhams x 3 / three months / x 3 / years / = 135,000 dirhams, so that the value of the end of service benefit is for a total of 13 year is 397,500 dirhams.
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