You are here

‘Rising number of early retirees a threat to Social Security Corporation’

By Dana Al Emam - Sep 06,2014 - Last updated at Sep 06,2014

AMMAN — The Social Security Corporation (SSC) warned on Saturday against the increasing number of early retirees, saying the expenditure on early retirement pensions is threatening its sustainability.

The average growth rate of SSC retirees during the past five years has reached 11.5 per cent, while the average growth rate of subscriptions was limited to 10 per cent, SSC Media Director Musa Subeihi told The Jordan Times in a phone interview.

“This is a very dangerous indication related to the corporation’s sustainability,” he said, highlighting early retirement as a major contributor to the issue with over 5,770 cases registered since the new Social Security Law went into effect on March 1, while regular retirement cases were around 1,380.

During the same period, retirement pensions amounted to JD55 million, of which JD31 million were for early retirees, accounting for around 54 per cent of SSC retirement expenditure, according to Subeihi.

He noted that early retirement cases constitute around 43 per cent of total cases at the SSC, with 71,000 early retirees out of a total of 163,000 pensioners.

The average age of early retirees is 50, compared to 52 for regular retirees.

Subeihi attributed the “high” early retirement figures to subscribers’ difficult economic conditions, which make them look for other jobs once they are eligible for early retirement to earn another salary to add to their pension, in addition to “not enough” job security or protection in the workplace.

Under the Social Security Law, subscribers eligible for early retirement should either be above 50 and have a minimum of 252 paid subscriptions for men and 228 for women, or have 300 paid subscriptions and be above the age of 45.

Subeihi said early retirement should be limited to subscribers with hazardous jobs whose health might be affected if they work for many years.

The privatisation of several public institutions resulted in the early retirement of around 4,900 subscribers, he noted.

Low employment rates among Jordanians of working age are also to blame for the corporation’s low revenues.

“Jordanians of working age are around 4.3 million according to official figures, while around 1.6 million of those have jobs… therefore, they are not covered under the social security umbrella,” Subeihi said.

The media director called on private institutions to boost job security measures in order to encourage workers to remain employed until they reach regular retirement age.

The SSC also seeks to increase its income by addressing insurance evasion by public and private institutions, he added.

Last month, SSC Director General Nadia Rawabdeh said the corporation will take stricter measures in freezing movable and immovable assets of defaulting institutions with very old dues. 

At a meeting with reporters, Rawabdeh said the accumulated unpaid dues of institutions amounted to JD127 million since the corporation’s establishment in 1985, noting that the SSC has signed payment scheduling agreements for dues worth JD34 million.

She explained that around JD26 million of the total are fees that have not been paid for the past two months and that the SSC does not take any legal action before the completion of that two-month period.

up
132 users have voted.


Newsletter

Get top stories and blog posts emailed to you each day.

PDF