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Bahraini pensioners from the private sector could soon apply for a new pension commutation loan just two years after their last one – matching the rule already enjoyed by government retirees.
The proposal, which won unanimous approval from Parliament earlier this month, is set to be debated by the Shura Council on Sunday.
The draft law amends Article 144 of the Social Insurance Law to remove what MPs and Shura members describe as a ‘long-standing disparity between private and public sector pensioners’.
At present, private-sector retirees must wait until their previous commutation loan is fully repaid before they can apply for another – a process that can take many years. Government and military pensioners, however, are allowed to reapply every two years from the date of their last commutation.
Shura Council services committee chairwoman Dr Jameela Al Salman said the amendment promotes fairness in insurance benefits.
“This amendment corrects a practical imbalance that has existed between pensioners in the two sectors,” she said. “It enhances equality in access to an important financial tool that supports retirees in managing their living needs.”
A commutation loan allows a pensioner to receive part of their future pension as a lump sum, in exchange for a fixed deduction from their monthly pension over a defined period.
During its review, the committee met officials from the Social Insurance Organisation (SIO), who confirmed that the service is considered a social protection tool rather than a commercial loan. Repayments are automatically deducted from pensions and are capped at 25 per cent of the monthly amount, minimising the risk of default.
Officials also assured members that actuarial studies show no negative impact on the fund’s cash flow or financial solvency, noting that the scheme is financed by beneficiaries’ instalments and regularly reviewed.
Dr Al Salman said the change would also improve retirees’ financial flexibility.
“Linking eligibility to the date of the last commutation, rather than the final repayment date, gives pensioners more timely access to liquidity when they need it most,” she said.
The committee further noted that aligning the rules could make private-sector employment more attractive by narrowing benefit gaps and supporting broader labour market policies.
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