PRIME MINISTERIAL EDICT NO. 5/1981
WITH RESPECT TO THE
RULES GOVERNING EXCHANGE OF RESERVES BETWEEN
VARIOUS RETIREMENT FUNDS

The Acting Prime Minister,

Having reviewed Law No. 13 of 1975 with respect to Rules of Retirement Pensions and Gratuities for Civil Servants and the Acts in amendment thereof;

And to Law No. 11 of 1976 with respect to Retirement Pensions and Gratuities for Officers and Servicemen of the Bahrain Defence Force and Public Security, and the Acts in amendment thereof;

And to the Social Insurance Law promulgated by Amiri Decree-Law No. 24/1976 and Amiri Decree-Law No. 12/1977;

And upon the submission of the Minister for Finance and National Economy;

And having obtained the consent of the Council of Ministers;

HEREBY DECREE :

Article 1

If any officer or serviceman of the Bahrain Defence Force or Public Security is employed, re-employed or transferred in or to a vacancy in the Civil Service where the person taking up such employment is treated in compliance with the provisions of Law No. 13 of 1975 with respect to Rules and Retirement Pensions and Gratuities for Civil Servants, his retirement entitlements shall be computed in conformity with the provisions laid down in this Law and in Law No. 11 of 1976 with respect to Retirement Pensions and Retirement Gratuities for Officers and Servicemen of the Bahrain Defence Force and Public Security, in proportion to the period spent in the civil or military service, provided that the aforesaid Law No. 13 of 1975 is complied with in respect of all other matters.

If any civil servant or employee is employed, re-employed or transferred in or to the Bahrain Defence Force or Public Security, being subject to Law No. 11 of 1976 with respect to Retirement Pensions and Retirement Gratuities for Officers and Servicemen of the Bahrain Defence Force and Public Security, his retirement entitlements shall be computed in pursuance of the provisions laid down in this Law and in Law No. 13 of 1975 with respect to Rules of Retirement Pensions and Retirement Gratuities for Civil Servants, in proportion to the period spent in the civil or military service, provided that the aforesaid Law No. 11 of 1976 is complied with in respect of all other matters.

Article 2

In case any officer or serviceman from the Bahrain Defence Force or Public Security or any civil servant or worker is employed, re-employed or transferred in or to a post in the private, public or co-operative sectors or in any joint venture, his retirement entitlements shall be computed proportionally on the basis of the period spent in the civil or military service, in the private, public or co-operative sectors or in employment in any joint venture, provided that the aforesaid Law No. 24 of 1976 is complied with in respect of all other matters.

In the event of any employment, re-employment or transfer of any employee previously engaged in the private, public or co-operative sectors or in any joint venture having been subject to Law No. 24 of 1976 in or to the Bahrain Defence Force or Public Security or the Civil Service, his retirement entitlements shall be computed proportionally on the basis of the period of service in the private, public or co-operative sector or in any joint venture in addition to the period of his civil or military service, provided that Law No. 11 of 1976 or Law No. 13 of 1975, whichever is applicable in his particular case, is complied with in respect of all other matters.

Article 3

In all the cases of employment, re-employment or transfer referred to in the preceding Article 1 and the first paragraph of Article 2, whether the State Treasury in respect of the military service or the General Organisation for Civil Service Retirement Fund in respect of the civil service, as the case may be, shall make payments to the authority undertaking the settlement of a retirement pension or retirement gratuities at the rate of 15% of the annual wage or salary based on the most recent wage or salary according to which the contribution is calculated. Such settlement shall be made for the total periods of service taken into account for the computation of the pension, including wholly or partially financed periods and unfinanced periods, if any, since such events are treated as though the individual concerned has resigned even if the conditions for eligibility to retirement pensions were satisfied prior to employment or transfer.

As for cases of employment, re-employment or transfer referred to in the second paragraph of the preceding Article 2, the General Organisation for Social Insurance shall make payment to the authority undertaking the settlement of a retirement pension or gratuity at the rate of 15% of the annual wage or salary based on the most recent wage or salary according to which the insurance contribution is calculated for all the periods taken into consideration for the pension.
The provisions of the following Article 4 shall be complied with in the computation of the period of service according to the terms and conditions set forth in the preceding two paragraphs.

Article 4

In the computation of the period of service in any of the sectors referred to in the foregoing articles, the fractions of a year shall be added and rounded up to one year of they amount to six months or more, However, if they are less than the said minimum, they shall be computed as they actually are when calculations are made of the amounts payable to the authorities mentioned in the preceding Articles, or upon the calculation of the final retirement pension.

Article 5

Where the employed, re-employed or transferred individual is eligible for a pension on grounds of an employment accident causing partial disability, the payment of his pension must continue to be made by the authority responsible for such pension. This authority shall be bound to make payment of the 15% referred to in the preceding Articles to the other authority for the whole of his period of employment on which basis the pension is calculated prior to the most recent employment, re-employment or transfer. He shall continue to combine the disability pension and the wage or salary whilst being in service. In addition, he shall combine his pension and his new entitlements.

Article 6

Subject to Article 6 of Law No. 13 of 1975, where the employed, re-employed or transferred individual was previously paid a leaving gratuity for a previous period of service from either of the two Funds referred to in this Edict, being namely the Civil Government Retirement Fund or the Military Retirement Fund, and should he wish to have the above period calculated in his pension, he shall be required to make payments on the basis stipulated in this Edict, either in a lump sum or in equal monthly instalments subject to interest at the rate of 8.5% per annum. It shall be stipulated that payments shall be made within a period of no more than 5 years as requested in writing by the individual concerned. However, if he dies before payment of all instalments, the entire period shall be calculated as though he has made all due payments and no instalments shall become payable following the death of the said individual. If there is a period of service of less than one year, for which no benefits are paid, the employed, re-employed or transferred individual who has already been paid a leaving gratuity (one lump sum), the amount due for the said period which is less than one year shall be computed in the amount to be transferred to the recipient authority, according to the same percentage of the salary or wage as set forth in the forgoing Article 3, provided that the terms of Article 4 of this Edict are complied with.

Article 7

The General Organisation for Social Insurance, the Military Committee for Retirement Fund at the Ministry of finance and national Economy, and the General Organisation for Civil Service Retirement Fund shall maintain an account in which shall be entered the retirement reserves which are to be transferred in respect of each individual subject to the provisions of the Edict. The exchange of amounts due to any of the above authorities shall take place with a period not exceeding 30 days from the date of employment, re-employment or transfer

Article 8

If the individual employed, re-employed or transferred in or to any job subject to the Social Insurance Law is eligible for the maximum pension stipulated in the Law under which he was covered, settlement of his entitlements shall be made and the maximum pension shall be paid thereto. In this particular case, the State Treasury or the General Organisation for Civil Service Retirement Fund shall not be responsible for making the 15% payments set forth in this Edict. The settlement of his new period of service shall be made according to the provisions of the Social Insurance Law in which case he will be entitled to a lump sum or pension as the case may be according to the said law and to continue collecting the said maximum of the pension referred to.
The provisions of the foregoing paragraph shall apply in the event of employment, re-employment or transfer in or to any of the job subject to the provisions of Law No. 13 of 1975, or in or to the Bahrain Defence Force or Public Security which are treated according to the provisions of Law No. 11 of 1976.

Article 9

In the implementation of the provisions of this Edict, employment or re-employment means each act involving a transfer of the individual. This shall not include cases of termination of service for justifiable causes, particularly the cancellation of the relevant post, dismissal on disciplinary or other grounds or resignation. The aforesaid 15% payments referred to in this Edict shall represent the proceeds of contributions deducted from the salary of the insured, or civil or military personnel in addition to the Government's or employer's contribution, as the case may be, including the annual interest charged at the rate of 5% thereof.

Article 10

The Minister of Finance and National Economy and the Minister for Labour and Social Affairs, each in his respective capacity, shall implement this Edict.
The above-mentioned Ministers shall issue the Ministerial Orders required for the implementation thereof.

Article 11

The provisions of this Edict shall apply to the cases of employment, re-employment or transfer taking place prior to the publication of this Edict in the Official Gazette, provided that the employment, re-employment or transfer have taken place following the date of putting into force the provisions of Law No. 13 of 1975, Law No. 11 of 1976 and Law No. 24 of 1976.

Article 12

This Edict shall be published in the Official Gazette. Subject to the provisions of the preceding Article 11, it shall come into effect from the date of its publication.

Khalifa bin Sulman Al Khalifa
Prime Minister

Dated: 28 January 1981
Published in the Official Gazette No. 1421 of 5 February 1981.