RIYADH: Saudi Arabia is preparing to introduce a new voluntary pension and savings program that will be available to both Saudi nationals and expatriate workers, according to the latest IMF Article IV consultation report.
The program is designed to boost domestic savings and is also expected to reduce the flow of workers’ remittances abroad. Saudi state media reported that the initiative is likely to be launched soon.
Remittances from expatriates in Saudi Arabia rose by 14% in 2024, reaching 144.2 billion riyals ($38.4 billion). Over the past decade (2015–2024), the cumulative outflow amounted to 1.43 trillion riyals.
By the first quarter of 2025, Saudi Arabia’s social insurance system had 12.8 million subscribers, of whom about 77% (nearly 10 million) were expatriates.
The IMF noted that recently enacted pension reforms, approved in July 2024, are expected to strengthen long-term financial sustainability. These reforms included raising the retirement age, extending the contribution period, increasing contribution rates, and limiting pension benefits.
While the reforms may not generate immediate fiscal savings, the IMF emphasized the importance of assessing and disclosing their medium-term impact.
The upcoming voluntary pension and savings program, open to both Saudis and expatriates, is seen as a welcome step that could significantly enhance household savings and reduce reliance on foreign remittances.
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