Home » News and Events » Jordan Labor Watch Warns: Forced Early Retirement Threatens Labor Market and Social Security Sustainability

Jordan Labor Watch Warns: Forced Early Retirement Threatens Labor Market and Social Security Sustainability

The Jordan Labor Watch has called on the government to stop forcing or encouraging its employees into early retirement, highlighting the negative effects of this policy on the labor market and the sustainability of the social security system.

In a statement issued today, Thursday, the Labor Watch explained that the recent expansion of early retirement, especially through the Greater Amman Municipality, poses deep risks that threaten the stability of the labor market and the sustainability of the social security system. It emphasized that promoting this approach as a temporary solution to administrative challenges leads to counterproductive results.

The Labor Watch asserted that this policy increases unemployment rates, as early retirees return to the labor market, increasing competition for available jobs amidst a scarcity of new job opportunities, thereby raising unemployment rates. These retirees are of an age where they can continue to work and produce for a longer period.

Additionally, it leads to lower pension salaries, as early retirement means fewer years of service, resulting in lower pension payments. This increases the number of poor people and deepens social inequality, thereby enhancing social and economic instability.

The statement pointed out that this inevitably leads to the depletion of the Social Security Fund’s resources, as the percentage of early retirees currently stands at approximately 50% of all retirees, most of whom are from government institutions. The large numbers of these retirees drain the fund’s resources, threatening its ability to meet its obligations to future generations and weakening citizens’ trust in the system’s sustainability.

The Labor Watch noted that the government’s policies encouraging early retirement within its institutions starkly contradict efforts to strengthen social protections and implement the National Social Protection Strategy. There is an urgent need to increase confidence in the social security system, not weaken it through policies that undermine its foundations and increase its fragility.

The Labor Watch added that these policies undermine citizens’ confidence in the sustainability of social security and its ability to attract new subscribers. Widespread fears among citizens regarding the government’s dominance over social security decisions, especially investment-related ones, have led to the government borrowing more than 50% of the social security portfolio, raising serious questions about the level of governance in managing the Social Security Corporation and pushing us to demand better governance towards enhancing its independence.

The Labor Watch called for the amendment of paragraph “B” of article 173 of the Civil Service System, which allows the competent appointment authority to terminate an employee’s services if they meet the early retirement conditions “at their request or without their request,” demanding the deletion of the phrase “without their request” to limit the misuse of these policies without clear foundations.

The Labor Watch affirmed that the continuation of these policies contradicts the government’s announced encouragement for employees to continue working and avoid early retirement except in cases of necessity. Therefore, the forced termination of the services of any public employee who meets the early retirement conditions should be stopped, and early retirement should be restricted to employees who request to retire early voluntarily.

In conclusion, the Labor Watch stressed the need to enhance confidence in the social security system to ensure its sustainability and inclusiveness, contributing to achieving social and economic protection for citizens, and enhancing the stability of the labor market and the national economy in general.

 

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