Oman is restructuring its pension and social protection system

DUBAI, April 7 (Reuters) – Oman overhauled its pension and social protection systems on Wednesday, part of an effort to reform the Gulf Arab state struggling with an economy battered by low oil prices and the coronavirus pandemic.

The decree issued by the ruler Sultan Haitham bin Tariq al-Said established a social welfare fund and a pension fund for military and security units.

Several existing pension funds would be incorporated into the two funds, the official ONA news agency said.

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Since coming to power in January 2020, Sultan Haitham has accelerated administrative and economic reforms, including introducing value added tax.

He said in October that the sultanate would speed up the establishment of a social security system for low-income citizens who could be affected by the government’s drive to reduce the country’s debt and reduce state spending. .

Wednesday’s decree says a cabinet-appointed committee has 12 months to restructure existing pension and welfare systems and draft welfare legislation.

People must have worked for at least 30 years to benefit from optional retirement under the new systems, he said, adding that an exception would be made for those who had already completed 20 years of service when the law on social protection will be enacted.

The relatively small oil producer has long considered reforming its economy, diversifying its revenue and introducing significant tax and subsidy reform, but those moves had dragged on under Sultan Qaboos, who died in January 2020 after ruling for a month. half century.

Oman faces a growing deficit and large debt maturities over the next few years.

S&P Global Ratings said last week that it expects the increase in Omani government net debt to remain high through 2024, but is expected to slow from 2020, due to rising oil prices and a fiscal reform plan.

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Written by Lisa Barrington in Dubai

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Joel C. Hicks