Khaberni - The Jordanian Labor Observatory affiliated with the Phoenix Center for Studies welcomed the Cabinet's decision to cease the application of previous decisions that obligated ending the services of employees who have either completed 30 years of service or have 360 social security contributions or more.
The Observatory stated in a press release that the decision aligns with the findings of the eleventh actuarial study, which warned of the expansion of early retirement and its negative impact on the sustainability of the social security fund.
The Observatory indicated in the statement that early retirement has become the rule rather than the exception. Social security data shows that early retirees constitute about 64 percent of total retirees and account for about 61 percent of the retirement payroll costs, negatively affecting the financial position of the social security, directly undermining the "subscription duration versus benefit duration" equation, and expanding the funding gap between revenues and expenditures.
The Observatory believes that the government's decision to stop mandatory retirement should be accompanied by legislative measures to ensure its effective implementation on the ground, notably by amending Article (100) of the Human Resources Management System in the public sector which allows the competent authority to end the services of an employee who has completed the conditions for early retirement upon request or without request, by removing the phrase "or without request" to limit unjustified early retirements.
The Observatory explained that forced expansion of early retirement, especially in the public sector, not only threatens the financial sustainability of the security but also poses threats to labor market stability and increases unemployment rates, as early retirees return to the labor market, which increases competition for available jobs amid a lack of new job opportunities.
This also leads to reduced retirement pensions, as early retirement means fewer years of service, resulting in lower retirement pensions, which increases the number of poor and deepens social disparities.
The Observatory confirmed that the government's decision to stop mandatory retirement represents a positive step in maintaining the sustainability of the social security fund, and it provides government institutions with more flexibility in managing their human resources according to actual needs, while preserving experienced skills that can transfer knowledge and build future leaders without rushing them into early retirement.
