Saudi Arabia Launches Voluntary Pension and Savings Scheme for Foreign Workers

1. Overview

Saudi Arabia is introducing a voluntary pension and savings program, the Public Pension and Savings Programme, for both Saudi nationals and foreign workers—a first of its kind in the Kingdom. This marks a significant shift toward inclusive financial planning and improved welfare for its large expatriate workforce .

2. Why It Matters

• Encouraging Household Savings: The initiative aims to increase domestic savings and curb the mounting outflow of remittances. In 2024 alone, expatriates sent home SAR 144.2 billion (~US $38.4 billion), which totaled around SAR 1.43 trillion over the past decade.
• Major Expatriate Participation: As of Q1 2025, Saudi’s social insurance system included approximately 12.8 million subscribers—77 percent of whom (nearly 10 million) were expatriates.

3. Policy Context

• Recent Pension Reforms: In July 2024, Saudi Arabia enacted reforms to its pension system—raising the retirement age, extending contribution periods, increasing contribution rates, and tightening eligibility for benefits. These measures aim to ensure fiscal sustainability, although immediate savings are not expected.
• IMF Endorsement & Oversight: The International Monetary Fund has welcomed this expansion and stressed the importance of transparency—especially given that the General Organization for Social Insurance (GOSI) manages assets equal to about 32 percent of Saudi GDP.

4. Benefits & Impacts

• For Workers:
  • Expatriate workers now gain access to structured, formal savings options within the Kingdom, offering security and long-term planning tools.
  • The program is voluntary—allowing individuals to opt-in according to their financial goals.
• For the Economy:
  • Retaining savings within Saudi Arabia supports reinvestment in local growth, aligning with Vision 2030’s objectives to boost economic diversification and strengthen household financial well-being.
  • Reducing remittance outflows could help stabilize local financial systems and increase domestic capital availability.

5. What’s Next?

Implementation details are still pending, including:

• Contribution rates
• Withdrawal rules
• Employer participation or matching
• Tax treatment and incentives

For updates, stakeholders—especially expatriate workers—should monitor announcements from the Ministry of Human Resources and Social Development, GOSI, and official releases aligned with Vision 2030