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Pension fund 'faces ballooning deficit'.

AN alarming future deficit of BD10.9 billion has been predicted for Bahrain's pension fund.

The Pension Fund Authority, which has two branches covering the public and private sectors, is looking at an increased virtual deficit that is calculated to include existing employees who have not retired yet.

The Administrative and Financial Audit Bureau in its latest report revealed that the virtual deficit has increased from BD6.3bn in December 2012 to BD10.9bn in December last year.

"The actual deficit in the public sector fund has increased from an annual of BD24 million in 2012 to BD129m by December 31 last year," said the report.

"Contributions last year were BD148m while benefits were at a cost of BD277m.

"The total revenues to the government fund were BD225m and spending was BD288m, which shows a full deficit of BD57m."

The report said the private sector fund was facing a deficit of BD40m, while contributions made were at BD170m and spending was BD210m by the end of December last year.

The fund for parliament, Shura Council, municipal councils and the Capital Trustees Board is facing a deficit of BD1.5m, with BD1.26m in revenues and BD2.78m in spending.

"However, under government commitment to make the difference under the establishment law, the fund has a surplus of BD1.2m."

The bureau also revealed the predicted time line for when the funds could go bankrupt.

"The public sector fund will go in deficit in 2028, the private sector fund in 2034, and the public representatives' fund in 2034," it said in the report.

"The government should also stop spending on expensive studies on bankruptcies and instead pump that money elsewhere."

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Publication:Gulf Daily News (Manama, Bahrain)
Date:Dec 6, 2017
Words:294
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