The Jordanian Agricultural Engineers' Association has organized a meeting to discuss Social Security Law. This meeting was attended by some of the union’s members as well as the Director General of the Social Security Corporation, Dr. Maen Nsour.
The SSC’s transparent approach, high level of integrity and foundation of dialogue as well as the avidity of the corporation to listen to varying views regarding issues related to social security are profusely praiseworthy, said the president of the Jordanian Agricultural Engineers' Association, Eng. Abdul Hadi Falahat during the opening of the event. He also pointed out that assuring the continuity of the SSC in order to deliver its mission to current and future generations is amongst the foremost aims to which all social civil institutions, labor unions and vocational unions strive toward. He also stated that social security legislations should initially take in to account the interest of citizens to contribute to the process of expanding the arenas of protection provided to the workforce in Jordan.
He went on to say that holding continuous dialogue sessions about the Temporary Social Security Law should enrich discussions through which suggestions, comments, improvements and aspirations are presented so that SSC management examines and takes into account in order to have an advanced Social Security Law that all national institutions participate in formulating, all individuals in society accept, and assures the financial stability of the corporation to serve future generations.
Al-Falahat pointed out that the Agricultural Engineering Union will continue discussing and reviewing along with the management of SSC all issues and rights of its insured members as well as the interests of the workforce in Jordanian society in order to establish a strong social protection system and improve the quality of services provided to the insured.
The Director General of the SSC, Dr. Maen Nsour affirmed through the meeting that the new temporary Social Security Law was an urgent requirement needed to develop and reform the social security insurance system in accordance with economic and social developments in the country. This was to enhance the role of the Social Security Corporation in contributing to achieve economic and social protection for citizens more effectively whether in respect to current or future generations. This is due to the fact that the corporation intends to present through this law a future vision that is new and modern enough to represent the concept of social security and social protection. This vision is founded on the basis of comprehensive Social Solidarity, Justice and Protection as it aims to provide protection to most of the workforce, secure insured retirees, protect the insurance system and assure its continuity to be able to meet its commitments toward all generations.
He also stated that one of the most important goals of the new Social Security Law is to enhance the protection of the labor force through extension of the coverage base, application of new insurances, support of current insurances, inclusion of laborers working in dangerous occupations, and the promotion of occupational health and safety by obligating establishments and workplaces to comply with health policies and safety standards. As well as to strengthen the principle of good governance within the SSC and its investment body to promote and strengthen its performance on insurance and investment levels and firmly establish its role in developing a more in-depth approach for social protection in the Kingdom.
He indicated that one of the most significant advantages brought forth by the new amendments is the correlation between retirement salaries and inflation in the country (i.e. annual living cost) as this should ensure to sustain buying power. The high cost of this correlation did not prevent the corporation from taking this as a high priority as it will protect the largest segment of insured retirees. This is because the aim of retirement pension is to provide retirees with an appropriate life while ensuring the adequacy of their retirement pension to cover basic living expenses. For this reason, the corporation is committed to take this legal approach which aims at creating regular annual increase to retirement pensions to protect them against inflation and also maintain its buying power. As for setting the upper limit of this increase to (20) Jordanian Dinar, Dr. Nsour clarified that this limit has been introduced after conducting an in-depth study of retirement salary scales and inflation rates in the Kingdom over the past several years. This should provide protection to (95%) of retirees whose salaries are below (500) Jordanian Dinar. Needless to mention, the annual upper limit of this increase shall reduce the gap between those with high retirement salaries and the rest of the insured retirees. This is because this gap has been increasing constantly over the past few years, therefore the (20) JD increase came to support the majority of retirement salaries. If there was no upper limit the country would have witnessed a great increase in high salaries which will cause a greater gap between retirees. For instance, the annual increase of a retiree whose salaries is (13,000) JD would be (520) JD, assuming the inflation rate is 4%, which in such case this increase would be 100 times the occurred increase for a minimum salary retiree. This is absolutely unfair and unacceptable as it does not represent the purpose of social security and obviously is not the social protection that SSC endeavors to promote.
He also indicated that the new law has supported the approach of SSC in extending social security coverage to the entire workforce and to all citizens by means of redefining 'the insured' to being the 'natural self' instead of the 'hired worker.' This then allows business owners, self-employed people, business partners, and housewives to be covered under the umbrella of social security. He stated that the umbrella of social security so far covers (920,000) active subscribers which constitutes (58%) of the Kingdom's workers. The aspiration of the SSC is to extend its coverage to the entire workforce and to all citizens as it is a very important strategic goal the SSC is working towards achieving in order to extend the protection base within society. So far, there are approximately (6,000) Jordanian housewives who have subscribed to the voluntary insurance scheme since the 1st of May 2010, which is the date on which the current law became effective.
Dr. Nsour also addressed the national roles of SSC whether on social or economic levels, particularly that the corporation works on creating a social protection system that is able to provide social services and contribute to the development of the country through partaking in projects that bring forth national prosperity and advancement. This is while noting that SSC succeeded in reaching an advanced level that allowed it to provide pioneering and distinguished services which are noted by the insured individuals in society. For this reason, it is important to note that the philosophy and the main role of SSC is to provide social protection and not money collection. This is because SSC is concerned with providing social protection and covering all laborers and citizens under the umbrella of the SSC in order for citizens and their families to be protected and assured of leading a decent life.
He added that the new law addressed the existing insurance disparities, such as the one caused by early retirement, which has developed into a trend over the past ten years draining social security funds and threatening its future. In addition, violating the concepts of social justice and solidarity between beneficiaries of the social system. It also damages the economy and the country’s developmental pathway, particularly while acknowledging that in the past (10) years, the rate of early retirement fell between 55% and 79% of all retirees from that period. This was also evident in the total percentage of retirees that reached 10% whereas the total growth in subscription was 9.8%.
Dr. Nsour also made note of the fact that the unreasonable amount of some retirement salaries was considered as one of the defects of social security insurance as it did not conform with the principle of solidarity, the understanding of protection and social equality, and the essence of social security. For these reasons, the new Social Security Law has dealt with this problem by placing cap limits on salaries dispensed by social security; being either 5 times the average salary or a maximum of (5,000) dinars.
He indicated that the financial position of the SSC after issuing the new Social Security Law is assuring in both the short and long term. Thus, SSC should be able to accomplish its mission and meet its responsibilities toward current and future generations. He clarified that the recent actuarial study alerted us of the danger of the previous existing Social Security Law if at the time it had been left unamended or did not develop into the current new Social Security Law.
He added that the new Social Security Law was developed according to the final 6th actuarial study, which was conducted by ILO, official factual data representing the economic and population status of the Kingdom, and the recent changes and developments of SSC activities and operations. The recent actuarial study shows that all changes and developments in SSC over the last few years will gradually increase insurance expenses. That said, it is noteworthy to mention that the corporation is currently preparing to conduct the 7th periodic actuarial study in cooperation with ILO.
Dr Nsour went on to say that actuarial studies are conducted in response to the needs of the Social Security Law which require the corporation to examine its financial position at least once every 3 years under the supervision of a specialized internationally recognized body in order to examine the financial balance of the corporation by comparing its revenues and expenditures over the coming decades.
He also affirmed that the new Social Security Law takes into consideration the demands announced by social and civil organizations, laborers and trade unions during the national dialogue event which was held by the SSC at the time the corporation intended to amend the law. This consideration has positively effected Social Security Law No. (19) of the year 2001 in respect to the insured who reached the legal age, the required subscription period to qualify for early retirement and old-age retirement. Furthermore, the new Social Security Law takes into account cases of insured persons who request early retirement but still have 1-5 years until they reach the age of (45) in order to qualify for early retirement as per the previous Social Security Law. In addition, the SSC adopted an accurate reasoned out principle for early retirement of workers in dangerous professions as there will now be a special system that will commence in the near future. This new system will allow them to request early retirement upon reaching the age of (45) provided they have subscribed for (18) years, if a man, and (15) years if a woman.
He added that SSC is focused on providing social protection through old-age, disability, death, work injury and many other insurances as it constitutes the essence of social security all around the globe. That said, the new amendments shall not only promote and protect the rights of the insured, but also introduce new advantages that will positively affect 95% of social security subscribers.
He indicated that the SSC will have maternity and unemployment insurance in effect starting from the 1st of September, 2011. These two insurances have been included in the temporary Social Security Law No. (7) for the year of 2010 to translate the approach of the SSC to extend its coverage and benefits to the insured.
He also assured that the enforcement of these two new insurances will have positive effects on the labor market and ensure its stability. Moreover, they will reinforce the level of protection provided to laborers and increase levels of productivity due to the positive relationship between employers and their employees. This will also protect the rights of both parties and ensure both parties are meeting their responsibilities toward each other. Also, maternity insurance will increase the involvement of women in the labor market and protect her rights and entitlements during her work period and after retirement as it guarantees her continuous coverage during her days of unemployment due to her having maternity leave. This will limit excuses and justifications presented to dismiss the employment of women in cases of marriage, pregnancy or maternity leave. As a matter of fact, maternity insurance shall encourage employers to employ women and as a result promote her role in the labor market.
He affirmed that unemployment insurance comes at first to provide social protection which SSC looks forward to providing and promoting in the labor marker especially that it is in harmony with the vision and philosophy of the corporation. At the same time, this insurance neither contradicts nor opposes any of the laborers' rights with respect to the unjustified work termination clauses mentioned in the Labor Law. On the contrary, it provides further protection to laborers when their employment is terminated unwillingly as this insurance then provides them with a salary for a certain period of time while keeping their subscription active during that period. As a result, laborers in this case are still covered against natural disability and death until the insured finds another job opportunity. This while noting that laborers in such case are still entitled to receive a compensation from their employer according to Jordanian Labor Law. Needless to mention, this insurance is considered an investment fund for the insured that he/she will retrieve completely or what remained from it in addition to its generated profit when he/she retires.
He also made note that the new Social Security Law allows the application of health insurance for the insured as well as retirees whether it is solely provided or through cooperating with the concerned parties. The SSC is currently conducting an in-depth study about this topic in order to conclude a correct formula for this important insurance that will bring this insurance to existence. That said, it is expected that health insurance will be introduced in the next phase. On another note, he mentioned that the SSC commenced the last stage of the Coverage Expansion Project in Amman and Zarqa governorates through obligating all enterprises and establishments to cover their employees regardless of their numbers starting from last April.
Dr. Nsour stated that at this stage of the reinforcement of social protection, the SSC is targeting the inclusion of small business employees such as those working at stores, groceries, restaurants, trades, car maintenance workshops, pharmacies and in the retail clothing sector, etc. This is due to the fact that these widely differing categories are the ones most in need of pension wages and of social security protection. Their coverage shall enhance the protection of the groups that remain excluded and shall contribute towards achieving SSC's vision of comprehensive social security for all within a sustainable and proper framework of protection.