Method of Calculating Pension

When a period is aggregated between the two schemes, the pension is settled according to the following:

1.    If the Civil or Military Retirement Scheme is the last scheme: the settlement of the pension is done by calculating the entire duration of periods between the two schemes in accordance with the provisions of the Civil or Military Retirement Scheme and on the basis of the last wage paid to the employee in this scheme.
2.    If the Social Insurance Scheme is the last scheme: the settlement of the pension is done by calculating the entire duration of periods between the two schemes in accordance with the provisions of the Social Insurance Scheme and on the basis of the average wage in the last two years.
If this average exceeds the last wage in the first scheme (for the contribution period in the Civil or Military Retirement Scheme) multiplied by the defined factor mentioned in Table (5) attached to the Law, the pension for the two periods, in this case, is calculated as follows:

a.    A pension is calculated for the contribution period served under the Social Insurance Scheme, based on the contribution wage in the last two years determined according to the regulations of such a scheme.
b.    Another pension is calculated for the period served under the Civil or Military Retirement Scheme, based on the last wage in such a scheme, multiplied by the defined factor mentioned in Table (5) attached to the Law.
The total pension will be the result of paragraphs (a) and (b) above, and paid to the contributor as one pension.

Example of calculating the pension if the last scheme is the Civil or Military Retirement Scheme:
The contribution period in the Social Insurance Scheme is (5) years and the paid wage is S.R. 4,000. The contribution in the Civil or Military Retirement Scheme is (30) years and the last wage is S.R. 12,000.
Retirement Pension: 12,000 × 35 ÷ 40 = S.R. 10,500.

Example of calculating the pension if the last scheme is the Social Insurance Scheme:
1.    The contribution period in the Civil or Military Retirement Scheme is (5) years and the last wage is S.R. 4,000. The contribution period in the Social Insurance Scheme is (30) years ended with the retirement of the contributor and his average wage in the last two years is S.R. 12,000.
Since the last wage in the Civil or Military Retirement Scheme after multiplying it by the defined factor mentioned in Table (5) exceeds the average (4,000 × 3.24340 = S.R. 12,973.60), the pension will be entirely settled on the basis of the last two-year average.
Retirement Pension: (12,000 ×) 35 ÷ 40 = S.R. 10,500.

2.    The contribution period in the Civil or Military Retirement Scheme is (5) years and the last wage is S.R. 12,000. The contribution period in the Social Insurance Scheme is (30) years ended with the retirement of the contributor and his average wage is S.R. 12,000.
Since the last wage in the Civil or Military Retirement Scheme after multiplying it by the defined factor mentioned in Table (5) is less that the average (2,000 × 3.24340 = S.R. 6,486.80), the pension will be settled as follows:
The pension for the period of contribution under the Civil or Military Retirement Scheme: (2,000 × 3.24340 × 5) ÷ 40 = S.R. 810.85.

The pension for the period of contribution under the Social Insurance Scheme: (12,000 × 30) ÷ 40 = S.R. 9,000.
The total pension: 810.85 + 9,000 = S.R. 9,810.85.