In 2012 the State of Kuwait’s population over the age of 65 made up 2 per cent and is expected to grow to about 7.5 per cent over the next three decades. In an effort to ensure basic income security for the growing number of older persons, the Government of Kuwait passed the Amiri Law Decree No. 61 of 1976 and launched the Public Institution for Social Security, providing a contributory pension scheme available to Kuwaiti workers in the public, private and oil sectors. This was followed by Contributory Old-Age Insurance (COAI) expanding the scheme to include the self-employed and others in 1981, and became compulsory in 1986. Kuwait's COAI is overseen by the Ministry of Finance and administered by the Public Institution for Social Security.
The COAI is a mandatory scheme and covers Kuwaiti citizens working in the public, private and oil sectors and the self-employed who contribute for a minimum of 15 years. Eligible citizens are entitled to a monthly benefit of 65 per cent of their most recent salary, or 75 per cent for retired military personnel. Monthly benefits can increase up to 95 per cent of the most recent salary of claimants who have contributed for 30 years and 100 per cent for military personnel who contributed for 27.5 years or more. Contributions amounts range between 18-28 per cent according to salary, shared by the employer (11 per cent), employee (5-15 per cent) and pension fund (2 per cent). Kuwaitis working abroad are also eligible for the scheme. According to the World Social Protection Report of 2014-2015, Kuwait's COAI has reached and maintained as a mandatory coverage level of 95 per cent of the eligible population.
Kuwait’s COAI is based on a long history of national pensions dating back to 1955 with the establishment of a pension scheme for civil servants. While Kuwait’s pension system has come a long way, some challenges remain in providing equal access to migrant workers. Nonetheless, the COAI represents a strong investment in income security for older persons and creates part of Kuwait’s national social protection floor.
Further Reading:
The Public Institution for Social Security, Kuwait (2009). Social Security Guide in Kuwait. Accessed from: http://www.pifss.gov.kw/upload/pifss_E_guide_eng_212.pdf on 26 November 2013.