Law of Benefit Exchange

The Law of Benefit Exchange between the Civil and Military Pension Laws and the Social Insurance Law allows any participant subject to the Social Insurance Law in the Kingdom of Saudi Arabia, who has a previous contribution period under the Civil or Military Pension Law, or vice versa, to request the merging of their prior service period with their current one under the latter law.

The term "first law" refers to the Civil Pension Law, the Military Pension Law, or the Social Insurance Law to which the participant was subject before transitioning to a job covered by the "latter law."

The term "latter law" refers to the Civil Pension Law, the Military Pension Law, or the Social Insurance Law to which the participant transitioned for a job covered under it and where their contribution period ended.

The Law of Benefit Exchange was issued on March 4, 2003, by Royal Decree on September 30, 2002, and the Council of Ministers’ decision on September 25, 2002. The law consists of six articles. Article One provides definitions for terms and the entities involved in the law. Article Two addresses the participant's right to combine contribution periods. Article Three outlines the conditions for merging service periods. Article Four discusses the obligations of the first law, including the actuarial value that must be transferred, and the obligations of the latter law, including the pension entitlement for the combined service periods. Article Five covers financial monitoring and the examination of the financial position. The sixth and final article includes general provisions related to the law. Some articles were amended at later times.

Anyone with a service period under the Civil Pension Law, Military Pension Law, or Social Insurance Law is eligible to participate in the Law of Benefit Exchange. The contribution period is the time calculated under one of the mentioned laws. If the participant’s contribution period does not qualify them for a pension under the law in which the service was completed, they will receive a lump-sum payment as compensation for their contribution period.

The Law of Benefit Exchange between the Civil and Military Pension Laws and the Social Insurance Law specifies the conditions for merging contribution periods. These conditions include: the contribution period under the first law must be at least one year, and the participant must not have received a lump-sum payment or pension for the contribution period they wish to merge. Additionally, the pension under the first law must not have been granted due to disability, and the participant must be under fifty-nine years old at the time of the merger request. The merged contribution periods cannot be used to qualify for an early retirement pension before the age of sixty under the latter law; the participant must complete the required period under the latter law unless the merger is due to privatization, or the service ended due to death, disability, or dismissal. In cases of mergers due to privatization or transition, the participant cannot combine a pension with the salary of a job covered by either the Civil or Military Pension Laws or the wages of a job covered by the Social Insurance Law. The participant must express their intent to merge their contribution periods before their service under the latter law ends.