Oman restructures pension and social protection system

DUBAI, April 7 (Reuters) - Oman on Wednesday restructured its pension and social protections systems, part of a reform push by the Gulf Arab state wrestling with an economy battered by low oil prices and the coronavirus pandemic.

The decree issued by ruler Sultan Haitham bin Tariq al-Said established a Social Protection Fund and a Pension Fund for Military and Security Units.

Several existing pension funds would be incorporated into the two funds, state news agency ONA said.

Since coming to power in January 2020, Sultan Haitham has accelerated administrative and economic reforms, including introducing value-added tax.

He said in October that the sultanate would accelerate the establishment of a social security system for low-income citizens who may be affected by the government's drive to bring down the country's debt and cut state spending.

Wednesday's decree said a committee formed by the Cabinet has 12 months to restructure existing pension and social protection systems and draft a social protection law.

People must have worked for at least 30 years to qualify for optional retirement under the new systems, it said, adding that an exception would be made for those who had already completed 20 years of service when the social protection law is issued.

The relatively small oil producer has long had plans to reform its economy, diversify revenue and introduce sensitive tax and subsidies reform, but those measures had dragged under Sultan Qaboos who died in January 2020 after ruling for half a century.

Oman faces a widening deficit and large debt maturities in the next few years.

S&P Global Ratings last week said it expects the increase in the Omani government's net debt to remain elevated through 2024, but it should decelerate relative to 2020, on the back of higher oil prices and a fiscal reform plan.

Writing by Lisa Barrington in Dubai

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