1 / 37

C o n t e n t s

C o n t e n t s. Jordan's Main Economic and Demographic Indicators The Jordanian Social Security Scheme (JSSS). Management and Operation of the JSSS 3.1 Objectives of the Social Security corporation of Jordan. 3.2 Governance. 3.3 Organizational Structure

kendis
Download Presentation

C o n t e n t s

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. M. Sartawy

  2. C o n t e n t s • Jordan's Main Economic and Demographic Indicators • The Jordanian Social Security Scheme (JSSS). • Management and Operation of the JSSS • 3.1 Objectives of the Social Security corporation of Jordan. • 3.2 Governance. • 3.3 Organizational Structure • 3.4 Administration Costs • 3.5 Coverage • 3.6 Payment of Pensions and Other Benefits • Amendment of the Social Security Law • Management of the Investment Fund • Scheme Funding and Financial Balance M. Sartawy

  3. Main Economic Indicators 2001 *GDP : 7930 million U.S. Dollars *GDP Growth(2000/2001): 4.18% *Standard of Living (GDP per Capita) : 1704 U.S.Dollars *Discount Rate : 5% M. Sartawy

  4. *Average Wage: JD 230 *CPI : 106.3 (1997 = 100) *Total labour force: 1.508 million of which 82% are Jordanian *Participation Rate : 29.1% *Unemployment Rate among Jordanians : 13.2% *Exchange Rate: 1JD = 1.412 U.S.Dollars. M. Sartawy

  5. Major Demographic Indicators:- • Population: 5.2 million (2001 estimates). • Population growth rate: 2.8% • Life expectancy : 69 male / 71 female • Crude mortality : 5 per thousand • Total Fertility : 3.5 M. Sartawy

  6. The Jordanian Social Security Scheme • (JSSS) was operated in the beginning of 1980 and is considered the third public pension fund in Jordan. • JSSS is operated and managed by the Social Security Corporation of Jordan M. Sartawy

  7. JSSS at present , providers two types of insurance:- • Old-age, disability and death. • Work injuries and occupational diseases. M. Sartawy

  8. JSSS also stipulates four other categories of insurance :- • Temporary disability due to sickness or motherhood. • Health care insurance. • Family allowances. • Unemployment. M. Sartawy

  9. The basic principles governing the JSSC • Compulsory participation by the employee and the employer. • The scheme is self-financed. • An important principle is that of ensuring scheme continuity by maintaining a balance between revenues and expenditures. • Pensions provided by the scheme depend on the wage (Pension Formula). M. Sartawy

  10. Objectives of the SSCJ *Providing pensions and compensation to workers thus satisfying their basic needs and achieving psychological stability to the workers. *SSCJ aims at redistribution of income inter-and intra-generation, reducing poverty level in the country. M. Sartawy

  11. *Creating a social compulsory saving mechanism. *Creating more job opportunities . *Expanding the productive capacity of the Jordanian economy. M. Sartawy

  12. Governance SSCJ has a juristic personality and financial and administrative independence. The corporation is governed by a tripartite Board of Directors (BOD) made up of representatives of :- M. Sartawy

  13. *The Government (five members). • *The General Federation of the Labor Unions (four members). • * The employers (four members). M. Sartawy

  14. The BOD responsibilities • The management of the SSCJ affairs. • The supervision of its activities. • Approving annual budgets and end-of-year financial accounts and balance sheet. • Setting-up the general plan for investing SSCJ funds. M. Sartawy

  15. Determine the organizational charts, job descriptions. • Drafting the necessary regulations and proposing the legislations related to the Social Security aspects. • Issuing executive and regulatory financial, administrative and technical instructions. M. Sartawy

  16. Administrative Cost M. Sartawy

  17. Coverage • The SSCJ adopted a gradual approach for implementing the categories of insurances. • SSCJ at present covers workers in private sector establishment, all workers and employees working for ministries and organizations who are not covered by the Civil or Military Pension Schemes. M. Sartawy

  18. Contributors M. Sartawy

  19. Contribution Revenue M. Sartawy

  20. Payment of Pensions & Other Benefits • SSCJ has provided insurance benefits to 470,000 beneficiaries (56000 pensioner, 245000 lump-sum compensation and 169000 beneficiaries from the insurance for work injuries and occupational diseases). • The total number of survivors has reached 54000 at the end of 2000. M. Sartawy

  21. JSSC expects the number of pensioners and survivors to increase to 120000 and 246000 in 2008 and 2023 respectively. • Total insurance benefits paid by JSSC since incorporation till end of 2001 reached 565 million JD (413 million JD pension salaries, 127 million JD compensations and the balance for work injuries compensations). M. Sartawy

  22. Amendment Of Social Security Law • The following policy measures have been implemented during the period (1993 – 2000):- • The minimum pension was raised from JD (480) to JD (600) a year as of 1/7/1993. • Pensions were increased by (10%) (with a minimum of JD 15 and maximum JD 50) effective Jan. 1st, 1996, resulting in shifting the minimum pension from JD (600) to JD (780). M. Sartawy

  23. Further amendments of SSL were introduced effective Jun, 1st 2001 including:- • Increase benefit factor from 2% to 2.5% for pensioners who already retired and those that will retire in the future. • Adjust the lower limit of the 10% pension increase effective since 1/1/1996 from JD 15 to 30, such adjustment shifted the minimum pension from JD 780 a year to JD 960 a year (equal to 94% of the minimum wage in Jordan). M. Sartawy

  24. Increase disability and death pension as follows:- • 1% for each year if contributory period is 120 months. • 0.5% for each year if contributory period is 60 months. • Rationalization of early retirement for males by increasing eligibility period from 15 years to 18 years and by applying the following pension reductions:- M. Sartawy

  25. M. Sartawy

  26. Increase contributions for old age, disability and death insurance from 13% (8% + 5%) to 14.5% (9% + 5.5%). • Increase old-age pension eligibility from 10 to 15 years. M. Sartawy

  27. Management Of The Investment Fund • Sound investment through preservation of the assets and reserves , while observing the principle of risk distribution. • Maintaining the real value of investment vis—vis inflation factor. • Increased self-reliance through the realization of adequate profits capable of balancing the revenues and obligations. M. Sartawy

  28. Providing the liquidity necessary to meet obligations through a balanced distribution of investments based on liquidity. • Contributing to the development of the productive base of the national economy through participation in economically feasible projects that, at the same time, have an appropriate developmental dimension. M. Sartawy

  29. The current asset allocation of the SSCJ is as shown below:- M. Sartawy

  30. SSCJ project selection criteria based on social, economical and financial factors . • There are several economic, political and legal factors that limit both domestic and foreign investment opportunities in Jordan. The domestic investment function at the SSCJ is performed under limited opportunities due to the following reasons:- M. Sartawy

  31. The financial market is thin. • Lack of opportunities of new projects particularly in the industrial field since the industrial base of Jordan is small. • Being a public sector body, the SSCJ may face some pressure dictated by certain requirements to pursue social goals which limits investment returns. M. Sartawy

  32. Improvement of the investment function by:- • Separate investment function and insurance function by establishing an independent investment entity called Social Security Investment Commission (SSIC) which has its own BOD consisting of seven members three of which are SSCJ representatives. SSIC started operation on Jan, 2003. • Increase of investment return through portfolio/Asset management contracts. M. Sartawy

  33. Upgrading internal human resources. • Streamlining the investment decision process to adjust to the amendments of laws and regulations (Security Law, Companies Law, Customs Law, ..etc) and the economic and political developments in Jordan and the Middle East region at large. • Review of investment policy and amend asset allocation taking into consideration medium and long-term obligations as well as demographic and economic factors. M. Sartawy

  34. Follow-up and action plans on studies conducted to initiate major investment projects in the field of electricity generation and other strategic projects in order to bring those projects into reality (Mining & Downstream, Water, Touristic projects, IT, Privatization….etc). • Cooperation and coordination with concerned institutions to develop capital markets in Jordan. M. Sartawy

  35. Scheme Funding And Financial Balance SSCJ Revenues, Expenditures and Surplus 1980 – 2023 (million JD) • Note: • 1980 – 2002 : actual data • Data for 2003 are based on SSCJ budget • Data for 2008 – 2023 are based on SSSJ fourth actuarial valuation study M. Sartawy

  36. In Conclusion • SSCJ is strong in terms of efficiency in management and administration. • Contribution collection efficiency has improved significantly. There is still some room for improvement. • In-house analytical capacity has improved. Further specialties are needed (actuary). M. Sartawy

  37. Investment funds are adequately managed and the scheme is achieving financial balance till the end of the 1st quarter of the century. • Financial management is efficient and law amendment would facilitate in collecting the money owed to SSCJ M. Sartawy

More Related