A New Pension System To Be Launched In 2019

The social security system is going to adopt a new plan for future retirees, as they will be able to receive pensions from the national pension fund.

The first is a basic pension and the second will be a supplementary pension which total amount will be determined before the second half of next year according to a set of criteria levels led by voluntary paid contributions, bringing the rate of replacement of labor income by 100% or more.

Labor, Employment and Social Security Ministry authorized a working group to begin preparation of the regulatory framework for the implementation of Article 104 of the draft Finance Law for the coming year, which is expected to be programmed by the deputies of the National People’s Assembly by mid November, because of its social nature.

It affirms that, without prejudice to the performances of the optional system of social solidarity, that is provided for in the legislation in force, the social security bodies that are charged with running the general pension system will create a retirement branch that have voluntary membership for regular users of the General Social Security System.

In order to expedite the application of the new procedure, and considering that the organization and functioning of the supplementary retirement branch provided for under this article, and the rules relating to the rights and duties that are associated with the voluntary association of supplementary retirement, it will be only only applied through a regulation, as the Labor Ministry approved the draft Finance Act, for several reasons, the most important of which is that the government considers this procedure as a mechanism that enables the social security agencies that are charged with running the compulsory public pension system to establish a supplementary retirement branch that has voluntary membership for the benefit of regular members in the social security, and in a step that is considered by the executive branch for the sustainability of the national social security system for retirement which has strong tremors since this pushed for the government to advance the relative retirement that dropped from the pension fund because of the disruption of financial balances of the fund.

Government believes that the new procedure would increase the attractiveness of the national social security system and the national pension system, which would automatically reduce the non-disclosure of persons and evade social obligations. 

The procedure also aimed to attract social security and the payment of contributions to the social security scheme. It should be noted here that the settlement constitutes the first condition to benefit from the voluntary right to join the supplementary retirement branch.

In addition to enhancing opportunities for improving the resources of future retirees, as the new provisions allow the positive impact on the basic system, ensuring its sustainability as a cross-generational basis, not to mention that future retirees can benefit from pensions from national pension funds, reaching up to 100% or more.

The new mechanism, or what the government has called the supplementary pension, which is determined by the total percentage of the insured contributions, can improve the pension fund’s resources and restore its financial balance, this is in view of the number of active, that are distributed by 70% in the category of wage earners and 30% in non-wage earners, and those who may adjust their status and are entitled to supplementary retirement individually and collectively. 

National Insurance Fund for non-employees, CASNOS, especially after the adoption of compulsory insurance for non-employees, makes non-compliant under the penalty of punitive measures and financial fines.