The Pensions Too…

By Jumana Ghunaimat

تم نشره في Wed 22 March / Mar 2017. 01:00 AM
  • Jumana Ghunaimat

We seem to have forgotten about some of the main points underpinning the 2017 Public Budget, which are unnecessarily draining a considerable portion of the public finance.

One of these sections is current expenses; including salaries, premiums, and debt interest, as well as pensions.

For some reason, the public does not recognise or perhaps dismisses the problematic amounts allocated for these sections; with a special sort of forgetfulness when it comes to pensions.

This is partly why our questions go unanswered every time we inquire as to where our money goes! All these grants and aids, and still we’re drowning in debt.

Through the last decade and a half, these current sub-sections of expenditure have grown unsupervised, way out of proportion. They comprise today nearly 80 per cent of the public budget.

First and foremost, the pensions section is one of the Budget’s most deformed and flawed sections. It is still growing exponentially out of control over the years, despite the establishment of the Social Security Corporation (SSC), which is supposed to umbrella all of Jordan’s sectors, and obviously, employees; include officials.

The SSC was supposed to fix the incremental pensions problem once and for all.

However, in figures, public sector pensions have grown by 250 per cent over the last 13 years; including civil and military pensions.

Obviously, this is a worrying issue which requires immediate, precise, researched intervention.

Recent data show the pensions’ bill has grown 3 per cent, by approximately JOD36 million, to JOD1.197 billion by end of 2016, from 2015’s to JOD1.161 billion.

In respect to total current expenses, pensions comprised nearly 17.3 per cent in 2016, compared to 17.2 per cent in 2015, and 15.1 per cent of the total expenditures section, compared to 14.8 per cent in 2015.

Back in 2015, pensions made up 4.3 per cent of the GDP. Now, it makes up 4.4 per cent.

This is not rocket science. It is not exactly unchartered territory either. But it does however, require a bold decision to dump the public pensions account; civil and military, and integrate the public body in the SSC network.

That way, we can take its weight off the shoulders of the Treasury, and lessen the widening deficit gap.

Now notably, this should have been done in 2003.

Bluntly speaking, the growth in the pensions’ allocation is closely related to retirement salaries account.

Many of the former excellencies and high ranking officials; including ministers who were in office for no more than a few months, are paid very high salaries for life, and for no apparent reason.

One solution would be to increase service time from 20 to 25 years or more, for the civil sector, and from 16 to 25 for the military.

Likewise, it is also important to address the corruption and imbalances under the remunerations and medical compensations sections, either by tightening auditing and monitoring measures, setting ceilings for these allocations, or both.

Sources say there is a growing inclination to revisit the pension and retirement law and expanding it to include another one of the authorities.

Should that be true, then what is the point of all these financial reforms? If so, it then serves no end other than to justify the government’s pointless price hikes, manipulation, lies.

Fact is, this pensions issue is no longer dismissible. It is not fair to dismiss biases and borderline corruption; such is the extension of baseless privileges. The same goes for subsidies extended for services and commodities the government has always complained about.

That said, most —if not all— of the deformities and flaws in the pension section are no more than merely unfair privileges extended to influential and former officials in total disregard to public interest and in reckless waste of public finance.

This article is an edited translation from the Arabic version, published by AlGhad.