The Jordanian Labor Observatory warns: Forced early retirement threatens the labor market and the sustainability of social security

The Jordanian Labor Observatory called on the government to stop referring its employees to early retirement “forcibly” or by encouragement, pointing to the negative effects of this policy on the labor market and the sustainability of the social security system.
The observatory explained in its statement issued today, Thursday, that the expansion of early retirement, through the Greater Amman Municipality recently, creates deep risks that threaten the stability of the labor market and the sustainability of the social security system. It stressed that promoting this approach as a temporary solution to administrative challenges leads to counterproductive results.
The Observatory confirmed that this policy leads to an increase in unemployment rates, as retirees return early to the labor market, which increases competition for available jobs in light of the lack of new job opportunities, and thus raises unemployment rates, as these retirees are at an age where they can work and produce for a longer period.
It also leads to lower pension salaries, as early retirement means fewer years of service, which leads to lower pension salaries, and this increases the number of poor people and deepens social inequality, which enhances social and economic instability.
The statement indicated that this necessarily leads to a depletion of the Social Security Fund’s resources, as the percentage of early retirees currently approaches 50 percent of all retirees, most of whom are from government institutions. The large numbers of these retirees deplete the Fund’s resources, threatening its ability to fulfill its obligations to future generations and weakening citizens’ confidence in the sustainability of the system.
The Labor Observatory pointed out that the government’s policies encouraging early retirement in its institutions are in stark contrast to the efforts aimed at strengthening social protections and implementing the national strategy for social protection. We urgently need to increase confidence in the social security system, not weaken it through policies that undermine its foundations and increase its fragility.
The Observatory added that these policies weaken citizens’ confidence in the sustainability of social security and its ability to attract new subscribers. The widespread fears among citizens about the government’s control over security decisions, especially investment ones, have led to the government borrowing more than 50 percent of the social security portfolio, which places a big question mark on the level of governance of the social security institution’s management and pushes us to demand its governance towards strengthening its independence.
The Labor Observatory called for the necessity of amending Paragraph B of Article 173 of the Civil Service Law, which allows the authority responsible for appointment to terminate the employee’s services if he fulfills the conditions for early retirement “based on his request or without his request,” calling for deleting the phrase “without his request” to limit the use of These policies are incorrect and without clear foundations.
The Observatory confirmed that the continuation of these policies contradicts what the government announces that it encourages workers to continue working and not resort to early retirement except in cases of necessity. Therefore, the forced termination of the services of any public employee who has completed the conditions for early retirement must be stopped, and early retirement must be limited only to the employee who submits a request to terminate his services out of a desire to refer himself to early retirement.
In conclusion, the Labor Observatory stressed the need to enhance confidence in the social security system to ensure its sustainability and increase its comprehensiveness, which contributes to achieving social and economic protection for citizens, and enhances the stability of the labor market and the national economy in general.

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