The General Pension and Social Security Authority said that the premiums paid monthly to the Authority on behalf of the insured / contributor / by the employers are calculated based on the salary of the subscription calculation and the insurance entitlements that the pension salary or termination of employment is paid on based on the “average premium calculation salary”.
In detail, Muhammad Saqr Al Hammadi, Director of the Pension Operations Department, said that the insured’s knowledge of the salary of the premium account shows him the value of the contributions paid monthly to the Authority on his behalf, as well as the value of the old-age pension. that he will be paid at the end of his employment, or the value of the termination benefit in the event of non-availability Conditions for entitlement to pension/old-age salary/.
He added that the first step towards the method of calculating the retirement salary or the end-of-service benefit is that the insured knows the difference between the total salary, the contribution calculation salary and the average contribution calculation salary, which leads to knowing the pension calculation salary (retirement salary) that he will receive or the termination compensation at the end of his employment.
Al Hammadi indicated that the total salary is the only one that the insured receives from his employer at the end of each month, while the salary for the subscription account in the public sector consists of elements which, in addition to the monthly allowances and allowances, also include the basic salary determined by the Pension Act on the cost of living, 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 employment contract, with a maximum of 50,000 dirhams His insurance claims at the end of his employment.
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 public 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 over the premium period in both cases if the service period is less.
And he continued: “If the salary of the subscription calculation for an insured in the public 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 adding 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 method of calculation is applied in the private sector, but on the average salary of the subscription calculation for the last five years of work.
Al Hammadi clarified that the retirement calculation salary (retirement salary) is calculated on the basis of the average contribution calculation salary multiplied by the fitness ratio according to the number of years of service, as 15 years of service for the insured gives the pension 60% of the average contribution salary as retirement pension, while 20 years of service are awarded The pension is 70% and this percentage increases by 2% for each additional year the insured spends after 20 years of service to reach the maximum pension, which is 100%, after 35 years of service.
According to the previous example, the value of the old-age pension for a person who has completed 20 years of service and the average salary for calculating his contribution is 15,000 dirhams, according to an equation multiplying 15,000 x 70% = 10,500 dirhams.
In the event that the insured is entitled to a severance payment, it will be calculated on the basis of the average salary of the premium calculation after its extraction according to the same previous method, taking into account that the insured’s compensation is calculated at the rate of one and a half month’s salary from the “average” for each year of service from one to five years. A two-month salary for each year of five to ten years and a three-month salary for any year exceeding ten years.
According to the previous example, if an insured has been employed for thirteen years, the remuneration for the first five years is calculated according to the formula 15,000 dirhams / average salary of the subscription calculation / x 1.5 / one and a half months / x 5 / year / = 112,500 dirhams, while the next five years are calculated According to the equation 15,000 dirhams x 2 / two months / x 5 / year / = 150,000 dirhams, and the remaining three years are calculated according to the equation 15,000 dirhams x 3 / three months / x 3 / year / = 135,000 dirhams, so the value of the end-of-service benefit for a total of 13 years is 397,500 dirhams.
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