Khaberni - The International Monetary Fund said that retirement salary payments in the Social Security Corporation are "likely to exceed" the value of subscription revenues starting from the 2030s "if the government does not implement substantial pension reforms," pointing out that continuing on this path may require, starting from the 2050s, financing from the general budget to cover the shortfall in security revenues, which would raise overall funding needs and increase levels of public debt.
The Fund, in the fourth review report within the Extended Fund Facility and the first review under the Resilience and Sustainability Facility arrangements with Jordan, which "the Kingdom" received a copy of, commended the government's progress in implementing the necessary reforms during 2026 to maintain the long-term financial sustainability of the Social Security Corporation, addressing the results of the 11th actuarial study of the Corporation, which emphasized the urgent need for reforms to support the financial sustainability of the retirement system, while maintaining its role as a major investor in the local economy.
The actuarial study conducted by the Social Security Corporation showed that the first breakeven point would be in 2030, where direct insurance revenues from subscriptions equal insurance expenses, indicating that the temporal distance of the first breakeven point is a positive indicator of better stability and financial sustainability for the institution.
It explained that a second breakeven point is expected in 2038, where insurance revenues and annual investment returns are not sufficient to cover the required insurance expenditures, if the return on investment does not improve.
The institution confirmed that the current study results show the need for legislative adjustments to the Social Security law, which would ensure all breakeven points are moved to longer time periods, enhancing the sustainability of the insurance system and protecting the rights of future generations, explaining that discussions related to amendments and reforms of the Social Security law will take place within a series of national dialogues with various stakeholders and experts, under the umbrella of the Economic and Social Council.
The Fund mentioned that the government is working - based on the results of the eleventh actuarial review - in cooperation with technical support from the International Labour Organization, the Fund, and the World Bank, on evaluating a set of initial proposals that include; reforming the early retirement system, extending the retirement age, and considering an actuarially fair entitlement rate, along with other options, to be included in the draft amendments to the Social Security law.
The draft amendments also propose replacing the current unemployment insurance program based on individual accounts with a real insurance program based on pooling risks, according to the report, which explained that a concept paper for retirement reform will be prepared and approved, including comprehensive standard amendments to ensure the long-term financial sustainability of the Social Security Corporation, based on which the draft amendments to the Social Security law will be referred to the House of Representatives by September 2026.
Regarding retirement, the Fund's report clarified that the assets of the Social Security Corporation's Investment Fund amounted to 17.9 billion Jordanian dinars (about 40% of GDP) in September 2025, noting that the institution "still achieves financial surpluses", although its fundamental financial situation "is experiencing a gradual decline".
The Fund estimated that contributions, after deducting retirement payments, had dropped to 0.8% of GDP in 2025, compared to an average of 1.8% of GDP during the period 2015–2019, with the onset of demographic pressures, but also importantly due to the ease and benefits of early retirement practices.
The report highlighted that those who retired early constituted about 60% of the new retirees during 2023 and 2024, while they accounted for about 50% of the total number of retirees covered by the Social Security Corporation as of early 2024, with data showing that the retirement rate to date has reached 64% of total retirees.
The report addressed a recent governmental decision that abolished the mandatory retirement requirement after completing 30 years of service in the public sector, which will be effective as of January 2026.
The Fund emphasized the importance of enhancing labor market flexibility and increasing women's participation in the workforce, by referring amendments to the labor law to the House of Representatives to increase labor market flexibility and enhance women's participation in the workforce and improve childcare provisions.
