Saudi Arabia will merge two state-run pension and unemployment insurance funds into one entity with almost USD 29 billion of local and foreign stocks.
The General Organization of Social Insurance and the Public Pension Agency – two state-run agencies that save part of the workers’ salaries to continue disbursing them after retirement from the public and private sectors - explained that the merger decision comes within the framework of the wise leadership's keenness to unify efforts and benefit from financial and human resources, develop services, raise performance efficiency and increase productivity.
The cabinet approved the combination of the Public Pension Agency and the General Organization of Social Insurance, also known as GOSI. The move will boost investment returns, reduce costs and help with their diversification, Finance Minister and GOSI Chairman Mohammed Al Jadaan said in a statement.
The enlarged entity’s assets will exceed USD250 billion, Bloomberg reported, citing Saad Al-Fadly, the CEO of Hassana Investment Co, the investment management arm of GOSI.
The merger would reduce costs and help increase investment returns, Al-Fadly said in remarks to Bloomberg.
“The merger will strengthen the position of the fund, enhance performance, and position GOSI as one of the top 10 pension plan investors in the world,” he underlined.
In remarks, the Saudi finance minister stated that the merger decision came as an extension of the ongoing reform and administrative restructuring process in accordance with the objectives of the Kingdom’s Vision 2030.
