FRA Approves New Al Baraka Bank Egypt Employee Insurance Fund Rules, Caps Subscription Salary at EGP 150,000
Egypt’s Financial Regulatory Authority has approved amendments to the employee private insurance fund of Al Baraka Bank Egypt, introducing a new definition for the salary used to calculate contributions and setting a maximum subscription salary of EGP 150,000 per month.
The amendments also establish a clear contribution structure, with monthly payments equivalent to 12% of the approved subscription salary, split between employees and their employer.
Employees will contribute 4%, while the employer will cover the remaining 8%, meaning Al Baraka Bank Egypt will bear two-thirds of the monthly contribution required under the fund’s amended rules.
The changes were approved under FRA Decision No. 2891 of 2026, dated September 16, and affect the private insurance fund registered with the regulator under No. 643.
Subscription Salary Capped at EGP 150,000
One of the most significant changes concerns the salary base used to calculate contributions.
Under the amended rules, the subscription salary will be defined as the employee’s monthly basic salary according to the remuneration regulations applicable at the institution on December 31, 2025, or on the employee’s appointment date if they joined after that date.
The salary used for the calculation will be capped at EGP 150,000 per month.
This creates a defined ceiling for the salary base against which the 12% monthly contribution is calculated, rather than allowing contributions to rise without an explicit upper limit.
Annual Increases Limited to 4.5%
The amended regulations also establish how the contribution salary can grow over time.
Periodic and promotion-related increases can be added to the salary base at a maximum compounded rate of 4.5% annually, starting January 1, 2027.
Any additional increases beyond those permitted under the amended rules will require an actuarial study and approval from the Financial Regulatory Authority before they can be incorporated.
The requirement links future changes in benefits and contributions to the fund’s actuarial position, helping ensure that additional obligations are supported by its long-term financial capacity.
Bank Covers Two-Thirds of Monthly Contributions
The amendments set total monthly contributions at 12% of the approved subscription salary.
Of this amount, the employee will pay 4%, while the employer will contribute 8%.
For an employee whose subscription salary reaches the EGP 150,000 ceiling, the total monthly contribution would therefore amount to EGP 18,000.
The employee’s share would be EGP 6,000, while the employer’s contribution would reach EGP 12,000.
This structure makes the employer responsible for twice the amount contributed directly by the employee.
Amendments Take Effect From January 2026
Although the FRA decision was issued in September, the approved amendments will take effect from January 1, 2026, in accordance with the decision previously adopted by the fund’s extraordinary general assembly.
That assembly approved the changes on March 15, 2026.
The amendments were subsequently reviewed by the FRA committee responsible for examining applications related to the establishment and modification of private insurance funds, which considered the matter at its August 13 meeting.
The authority’s Private Insurance Funds Supervision and Control Sector subsequently issued its report on September 8 before the final regulatory decision was adopted.
The FRA has also required the decision to be published on both the authority’s website and the fund’s website.
The changes provide Al Baraka Bank Egypt employees with a more clearly defined framework for calculating contributions, while the EGP 150,000 ceiling and actuarial approval requirement establish boundaries around how the fund’s future financial obligations can expand.