Dr. Hamed Kasasbeh

The Social Security Corporation has announced the results of its eleventh actuarial study as part of its periodic review of the system’s ability to continue meeting its obligations toward contributors and retirees over the long term. These results come at a sensitive economic moment, marked by overlapping financial pressures, demographic shifts, and labor market challenges, making their implications a matter of public policy rather than a purely technical reading of numerical indicators.

The study shows that the current financial position of the social security system is characterized by a degree of stability, and that the insurance funds are presently capable of meeting their obligations, particularly short-term benefits. This reflects sound financial management in the near term and provides policymakers with an important time window to address upcoming challenges in a measured and deliberate manner.

However, this stability should not be viewed as a permanent guarantee. The study indicates that contribution revenues are expected to equal expenditures by 2030, and that contributions combined with investment returns will become insufficient after 2038 if current policies remain unchanged. These indicators do not point to an imminent crisis, but they signal a shrinking margin of maneuver and a rising cost of reform the longer decisions are delayed.

The study also shows that the main pressures are concentrated in old-age, disability, and survivors’ insurance, due to the continuous increase in the number of retirees and the longer duration of pension payments, alongside slower growth in the contributor base. This reflects natural demographic trends as well as structural imbalances in the labor market, most notably the expansion of the informal economy and weak social insurance coverage, which calls for considering more flexible contribution arrangements that can expand the contributor base without undermining the foundations of the system.

Early retirement emerges as one of the most significant sources of pressure on the system’s financial balance, as it accelerates the shift of insured individuals from contributors to beneficiaries and leads to the premature exit of workers who are still capable of productive participation. Despite the social considerations surrounding this option, maintaining it in its current form calls for a gradual review that balances individual protection with sustainability requirements.

Social security is not limited to being a pension system; it represents a core pillar of economic and social stability. Regular benefit payments provide a stable source of income for a large segment of households and support domestic demand, helping to mitigate the effects of economic slowdown and strengthen social cohesion.

From a reform perspective, addressing social security challenges is not limited to complex financial or legislative decisions alone. It also includes operational reforms that can begin immediately. Expanding coverage, strengthening compliance, and reducing contribution evasion are direct tools that improve revenues, reinforce financial balance, and reduce the need for more costly measures at later stages.

International experience confirms that early and gradual reforms are more manageable and less costly than delayed reforms imposed under financial or social pressure. Addressing challenges in a timely manner preserves a wider range of policy options and lowers the political and economic cost of reform.

In conclusion, Jordan’s social security system faces a sustainability challenge that remains manageable if addressed at the right time. Current stability represents an opportunity, but it does not eliminate the need for a gradual reform path that addresses sources of pressure before they intensify. Ultimately, social security sustainability is not merely a financial issue, but a policy choice closely linked to long-term social and economic stability.