Article 5 of the Saudi Benefit Exchange Law

This article deals with the general financial side of benefit exchange, that is, the relationship between the two funds themselves, not the participant's individual rights.

The problem it addresses: aggregating periods may impose an extra cost on one of the two systems or both, because the last system calculates the pension for both periods as if spent in it, while the first system transfers an actuarial value under the tables as Article 4 regulates.

The solution the article sets:

• Determining suitable means of compensating the two systems for the extra cost that may result from adopting the benefit exchange law.
• This includes determining how burdens are distributed between the two systems.
• This is done through an actuarial study every three years.
• Taking into account the provisions on financial follow-up and examining the financial position that appear in the actuarial study on the basis of which the attached actuarial tables were prepared.

The article does not specify the body that carries out the study or the content of the compensation means, but leaves this to the study's results. Linked to it is paragraph 4 of Article 6, which provides for reviewing the law and the actuarial studies of financial costs whenever necessary, through a committee chaired by the Secretary General of the Manpower Council.

The practical meaning for the participant is that this article does not affect his right to aggregation or the calculation of his pension, but regulates the settlement of burdens between the General Organization for Retirement and the General Organization for Social Insurance.