ShareBy B Izzak
KUWAIT: The KD 3,000 grant to pensioners, announced by the government this week, appears to be in doubt after disagreements between MPs and the government regarding a draft law to amend pension legislation. During a special Assembly session yesterday, the government included the grant, covering some 200,000 pensioners and costing KD 589 million, in amendments to the pensions agency law, which called for raising the retirement age by three years.
MPs rejected the amendment and following several hours of debate, they passed a recommendation calling on the government to separate the grant from the legislative amendments. The government is unlikely to accept this recommendation, which threatens the grant. The move came following heated debate between MPs and the government, which wanted to raise the retirement age to 65 for men in exchange for the grant. Under the proposed amendments, the government also pledged to increase pensions by KD 20 every year. The Assembly decided to send those amendments back to the concerned parliamentary committees to discuss them.
During the debate in the special session, MPs proposed that the KD 3,000 grant for pensioners be made annually, while some lawmakers said the amount is too small considering the huge profits posted by the Public Institution for Social Security (PIFSS), the state-run pension agency, estimated at KD 7 billion. Finance Minister Abdulwahab Al-Rasheed said that the profits made by PIFSS are real, but most of them are due to a rise in the value of assets, adding it is not wise to liquidate assets to pay grants. The minister warned that without gradually increasing the retirement age, it is possible that PIFSS may not be able to pay pensions after a few years.
The minister said that it is not justifiable legally, constitutionally and morally to make a public establishment pay profits while it is facing an acute actuarial deficit and the government is transferring KD 500 million yearly to pay the shortfall. Rasheed said the cost of the KD 3,000 grant is KD 589 million, benefitting close to 200,000 pensioners. The minister insisted that amendments call to gradually raise the retirement age of government employees by three years starting from 2024, adding that even after that, the retirement age in Kuwait will be the lowest in Gulf countries. He added that employees can still avail of the benefit of early retirement after serving for 30 years for women and 35 years for men.
A majority of lawmakers categorically rejected this amendment, saying this will be another way of taking back the grant and other benefits. MP Hasan Jowhar said Kuwait has assets worth $800 billion invested overseas, adding that Kuwait should learn from the Russian example by investing more locally and helping citizens. Several MPs insisted that the government is giving the grant to pensioners with one hand and taking away benefits from employees with the other. MP Saud Al-Mutairi said "the real problem is giving a grant to a section of people and making another section pay for it. We are before a landmine".
