Raad Mahmoud Al-Tal

The Social Security Law is not just any law. It is one of the most important economic laws in Jordan because it affects the future of the social insurance system for millions of people. Therefore, any discussion about it should focus on three main issues: financial sustainability, fairness among contributors, and coverage and efficiency in applying the law.

The first issue is the actuarial study. Has it included a “sensitivity analysis” for different age groups? This is important to protect the rights of people who have already contributed for many years. About 60 per cent of the current law is being changed, so some may wonder why a new law is not proposed instead.

The second issue is fairness. What will happen to people who are close to retirement? Will they be affected by new formulas or deduction rates? One suggested approach is to protect those with 15 years of contributions and gradually apply changes to those with 10–15 years. Early retirement and raising the mandatory retirement age are also important issues. These affect the total number of early retirees each year and the system’s financial stability.

The third issue is coverage. Many small businesses with five or fewer employees are not fully covered. Denying them social insurance for a year reduces protection and affects unemployment insurance funds. Currently, only about 65 per cent of formally employed workers are covered. Expanding coverage should be a key reason for changing the law. Another question is about the 1 per cent extra contribution for workers in hazardous jobs. Is this fair? Does it properly compensate for risk?

Financial sustainability is also a major concern. Social insurance expenses now take up around 85 per cent of the system’s revenue. It is important to review income, future obligations, and the cost of early retirement. The investment fund also needs attention. About 64 per cent of the fund is invested in government bonds and treasury bills. This is a high concentration. Should the fund diversify? Could it invest more in private sector projects or national projects, like water networks, railways, or renewable energy?

Global and regional risks must be considered too. Over the past 25 years, the region has faced major events roughly every three years, affecting the economy and investment returns. Is the system prepared for such shocks? Should part of the income or investment returns be set aside for emergencies? Other points include financial and administrative changes, like allocating JOD 100,000 to trade unions or reviewing contributions for Jordanians working in countries where retirement is at 60. The draft law also suggests reorganizing the Social Security Corporation, including new governance boards and possibly a “Social Security Governor,” to ensure independence and long-term financial sustainability.

These points highlight the main challenges: protecting contributors’ rights, ensuring fairness, improving coverage, and managing financial risks. The dialogue should continue to reach the best decisions, especially since implementation is delayed until 2030. This gives plenty of time for a careful and inclusive discussion that affects all Jordanians.