Saudi Arabia set to launch voluntary pension scheme for workers

Saudi Arabia is poised to introduce a new voluntary pension and savings program aimed at both Saudi citizens and expatriate workers, according to the International Monetary Fund’s (IMF) latest Article IV consultation report, as reported by Al-Eqtisadiah.

The initiative is part of the Kingdom’s broader strategy to enhance household savings and reduce the volume of outbound remittances.

The forthcoming Public Pension and Savings Program is expected to be announced in the near future.

Foreign remittances from Saudi Arabia surged by 14 percent in 2024, reaching SAR 144.2 billion (USD 38.4 billion).

Over the past decade, total remittances have amounted to SAR 1.43 trillion, reflecting the significant financial outflow driven largely by the country’s expatriate workforce.

As of Q1 2025, there were 12.8 million active subscribers in the Kingdom’s social insurance system, of whom approximately 77 percent—around 10 million—are non-Saudis.

The IMF noted that recently enacted pension reforms, approved in July 2024, aim to enhance the system’s long-term fiscal sustainability.

Key changes include raising the retirement age, lengthening contribution periods, increasing contribution rates, and tightening eligibility for benefits.

While these measures are not expected to yield immediate fiscal gains, the Fund emphasized the importance of evaluating their medium-term implications.

The upcoming voluntary pension scheme is seen as a constructive step towards encouraging financial resilience and reducing reliance on foreign remittances.

The IMF also drew attention to the substantial asset base held by the General Organization for Social Insurance (GOSI), estimated at 32 percent of Saudi GDP, underscoring the need for greater financial transparency and more defined asset allocation policies.