Wednesday, May 29, 2024
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His Majesty Sultan Haitham bin Tarik of Oman has issued two significant Royal Decrees that have far-reaching implications for the country’s social protection and pension systems. Royal Decree No 50/2023 introduces the bylaw for the establishment of the Social Protection Fund, while Royal Decree No 51/2023 promulgates the bylaw for the Pension Fund of Military and Security Apparatuses.

Under Royal Decree No 50/2023, the Social Protection Fund is empowered to assume control over various pension funds and institutions. Article 2 of the decree transfers the duties, assets, rights, and obligations of several pension funds, including those of the Ministry of Defence, the Royal Office, the Royal Oman Police, the Internal Security Service, the Royal Guard of Oman, the Sultan’s Special Force, the Diwan of Royal Court, and the Civil Service Employees Pension Fund. However, certain assets and premises of the Defence Ministry’s Pension Fund will be transferred to the Pension Fund of the Military and Security Apparatuses, subject to agreement by the respective chairmen of the Social Protection Fund and the Pension Fund of the Military and Security Apparatuses.

Moreover, the Social Protection Fund will also take over the duties, obligations, and financial receivables of the Public Authority for Social Insurance. Any differences in the financing ratios between the funds mentioned earlier and the Public Authority for Social Insurance will be settled, and the settlement amount will be recorded in the financial records of the Social Protection Fund. Additionally, the Social Protection Fund will absorb the obligations and related data of the pension programs of Petroleum Development Oman and the Central Bank of Oman, along with assets of equivalent value from these programs.

Furthermore, the Social Protection Fund will assume the rights and obligations associated with the project on restructuring funds and systems of retirement and social protection under the National Fiscal Balance Programme and the National Programme for Fiscal Sustainability and Financial Sector Development.

Royal Decree No 50/2023 establishes the Social Protection Fund as the legal successor to the aforementioned pension funds, the Public Authority for Social Insurance, and related programs. This legal succession will apply to all contracts, agreements, investments, partnerships, and alliances made by these entities within Oman and internationally. Importantly, this transfer of responsibility does not impact the end-beneficiaries of the pension funds, assets, obligations, and programs.

The decree also addresses the transfer of employees. Article 4 stipulates that employees of the Diwan of Royal Court’s Pension Fund, the Civil Service Employees’ Fund, and the Public Authority for Social Insurance will be transferred to the Social Protection Fund, along with their financial grades and allocations. The Social Protection Fund’s Board of Directors, in coordination with unit heads, may decide to transfer employees from the aforementioned funds or specialized staff from the Social Development Ministry’s Directorate General of Social Welfare as per organizational needs.

To facilitate the implementation of the bylaw, Article 5 instructs the Board of Directors of the Social Protection Fund to issue the necessary regulations and decisions. Until new regulations are in place, the existing rules will continue to be enforced, provided they do not contradict the provisions of the attached bylaw.

In tandem with the establishment of the Social Protection Fund, Royal Decree No 51/2023 introduces the bylaw for the Pension Fund of Military and Security Apparatuses. Under this decree, the employees and associated financial aspects of various departments, including the Ministry of Defence, the Royal Office, the Royal Oman Police, the Internal Security Service, the Royal Guard of Oman, and the Sultan’s Special Force, will be transferred to the Pension Fund of Military and Security Apparatuses. The implementation of this transfer will be based on regulations and mechanisms to be determined by the Pension Fund’s Board of Directors in coordination with the military and security apparatuses’ heads and commanders.

Similar to the Social Protection Fund, the Chairman of the Board of Directors of the Pension Fund of the Military and Security Apparatuses is instructed, under Article 3, to issue the necessary regulations and decisions to enforce the bylaw. Until new regulations are established, the existing rules will remain in effect, provided they do not contradict the provisions of the bylaw.

To ensure consistency and clarity, the decree replaces specific phrases with the unified term “Pension Fund of the Military and Security Apparatuses” in all relevant laws and royal decrees. The decree further emphasizes the cancellation of any legislation or provisions that contradict its requirements.

Both Royal Decree No 50/2023 and Royal Decree No 51/2023 will be published in the Official Gazette and will come into effect the day after their respective publishing dates. These measures demonstrate Oman’s commitment to enhancing its social protection and pension systems and streamlining its administration under the newly established funds.

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