NNA – The Parliament of Lebanon hasnbsp;passednbsp;a law that establishes a comprehensive pension system fornbsp;private sectornbsp;workers and fundamentallynbsp;reshapesnbsp;the governance of the National Social Security Fundnbsp;(NSSF).nbsp;
Previous attemptsnbsp;spanning three decadesnbsp;tonbsp;replaceLebanonrsquo;snbsp;end-of-service indemnity system with a modern pension schemenbsp;hadnbsp;been met with failure.nbsp;Until this recent milestone,nbsp;Lebanonnbsp;stood asnbsp;onenbsp;ofnbsp;onlynbsp;twonbsp;countriesnbsp;in the Arab regionnbsp;without a scheme that protectsnbsp;insured workersnbsp;with long-term periodical benefitsnbsp;fornbsp;retirement, death and disability.
The International Labour Organizationnbsp;(ILO)nbsp;provided extensive technical support to the relevant parliamentary committees, the NSSFnbsp;andnbsp;workers and employersrsquo; organizations in Lebanon to reach consensus over the design and parameters of the scheme, andnbsp;the finalnbsp;textnbsp;of the legislationnbsp;that wasnbsp;adopted by Parliament,nbsp;ensuringnbsp;its alignment withnbsp;international labour standards for social security.nbsp;
ldquo;We congratulate all partners in Lebanon for achieving this historical milestonerdquo;nbsp;saidnbsp;ILO Regional Director for Arab Statesnbsp;Ruba Jaradat.nbsp;ldquo;At a time of unprecedented social and economic crises, Lebanon shows that advancing structural reforms is possiblenbsp;and at the same timenbsp;unavoidable. Stronger public social protection mechanisms and better functioning national institutions are critical tonbsp;ensurenbsp;thatnbsp;the economic recovery is also accompanied by a much need advancement of socialnbsp;justice,ldquo;nbsp;shenbsp;added, acknowledging the collaboration with successive ministers of Labour who spearheaded thisnbsp;endeavour.nbsp;
Nicolasnbsp;Nahas, former minister and member of parliament,who headed the parliamentary sub-committee that revised and finalized the project of the law in the past legislature, considers this a major milestone for Lebanon ldquo;We have pursued this transformative legislation for years and are elated to witness its approval today.nbsp;Itnbsp;marks a crucial step forward for our countrynbsp;given the benefit it will bring to both workers and employers. We hope that the implementation will meet the set targets in due courserdquo;,nbsp;he said.
Older peoplenbsp;in Lebanonnbsp;have been hit hard by the unprecedented crisesnbsp;that have afflictednbsp;the countrynbsp;since 2019 – from the collapse of the economy to the Covid-19 pandemic, and the August 2020 Beirut Port explosion. Rising rates of poverty and unemployment across the country,nbsp;coupled with an inadequatenbsp;social protection system,nbsp;have made it increasingly difficult for all people to meet their basic needs andnbsp;havenbsp;in particularnbsp;negativelynbsp;affectednbsp;the social and physical wellbeing of those in later life.nbsp;Even prior to thesecrises, the end-of-service indemnity systemnbsp;fell shortnbsp;in providing protection in old age. nbsp;The value of these indemnities has plummeted as a result of the collapse of the Lebanese Pound leaving thosenbsp;insurednbsp;without any source of incomenbsp;andnbsp;forcing many of themnbsp;tonbsp;continuenbsp;working intoold age.nbsp;
Thenbsp;newnbsp;pension benefitsnbsp;will be calculatednbsp;taking into accountnbsp;two guaranteed minimum amounts: the first is 80 percent of the minimum wage after 30 years of contribution, the second is 1.33 percentnbsp;for each year of the insuredrsquo;s revalorized average wage. Benefits will be paid in case of disability and will be transferred to survivors in case of the death of the insured member or the pensioner. Pension values will also be indexed to inflation through a yearly adjustment process.nbsp;
ldquo;This is one of the most important socioeconomic reforms Lebanon has achieved in the past 30 years.rdquo; commented Mohammed Karaki, Director General of the NSSF ldquo;We have worked hard to completelynbsp;revisenbsp;thenbsp;social security law,nbsp;sonbsp;asnbsp;tonbsp;ensure anbsp;decentnbsp;retirementnbsp;ltonbsp;the Lebanese population. We are grateful for the support received from the ILO, especially in relation to the actuarial and legal standards advice and thenbsp;continuous and closenbsp;accompaniment on this project,nbsp;andnbsp;wenbsp;look forward to continuing the partnership to developnbsp;solidnbsp;systems fornbsp;its deliveryrdquo;, he added.
Bilal Abdallah, member of parliament and head of the parliamentary committee on Health, Labour, and Social Affairs said quot;The law passed by Parliament, based on the proposal put forth by the subcommittee and endorsed by the joint committees, is comprehensive and aligns with essential international standards. Tailored to the unique Lebanese context and realities, it strikes a delicate balance between redistribution and capitalization, and streamlines the fundrsquo;s management and investment, ensuring the sustainability of its benefits.rdquo;nbsp;In fact, as a key aspect of the reform, the law introducesnbsp;an entirelynbsp;new governance structure for the NSSF. The current board of directors will be replaced by a smaller board of ten members, four representing workers, fournbsp;representingnbsp;employers and twonbsp;representingnbsp;thenbsp;government. Notably, six of the members willnbsp;be required to benbsp;specialized experts on matters of social protection. Overseeing the funds will be an independent committee of investment, comprised of specialized experts, along with a dedicated investment arm. The NSSF is also mandatednbsp;to institutenbsp;a system for the electronic payment of contributions and benefits, and a digital platform for workers and employers to access information on their social security rights.
ldquo;The new system will improve the well-being of Lebanese who reach retirement age and strengthen social solidarity which is very important for Lebanon these days,rdquo; said Luca Pellerano,nbsp;Seniornbsp;Socialnbsp;Protectionnbsp;Specialist who has led technical engagement on the projectnbsp;from thenbsp;ILOnbsp;Regional office in Beirut. ldquo;This has fundamental importance, not only for reducing social vulnerabilities, but also for ensuring the proper functioning of the entire social security system. The new law should encourage employers to declare full salaries to the NSSF, from which other branches of the systemnbsp;-nbsp;most importantly the health insurance branchnbsp;-nbsp;will in turn benefit.rdquo;
The reform was hailed by all social partners, who actively engaged in a series of social dialogue over the past years ultimately reaching a consensus on thenbsp;final outcomenbsp;of the reform.nbsp;In his remarks,nbsp;Bcharanbsp;el Asmar, the head of the General Confederation of Workers (CGTL), deems this law ldquo;a fundamental turning point in the interests of the insured, serving as a guarantee for the continuity of salary post-retirement.quot; Emphasizing the urgency of swift implementation, he underscores the necessity of promptly issuing the requirednbsp;implementationnbsp;decrees to quot;establish a minimum guarantee of social security for workersnbsp;whichnbsp;they have been without for over two decadesnbsp;ndash;nbsp;a reality thatnbsp;was further exacerbated by the suffocating crisis and the erosion of the value of indemnities, savings, and deposits.quot;nbsp;
On the other hand, the Association of Lebanese Industrialists, through its Presidentnbsp;Salimnbsp;Zeenni,nbsp;welcomed this reform as a ldquo;blessed step resulting from a long struggle and close cooperation between the private sector, CGTL, and the Lebanese state, with the unwavering support of the International Labour Organization,nbsp;whonbsp;workednbsp;tirelesslynbsp;and made tremendous efforts to develop the key parameters for this lawnbsp;and contributed tonbsp;its successful conclusion.rdquo;
Thenbsp;reformnbsp;representsnbsp;a criticalnbsp;componentnbsp;of a broader nationalnbsp;social protectionnbsp;strategynbsp;which was recently adoptedby the Council of Ministers,nbsp;withnbsp;financialnbsp;supportnbsp;to the processnbsp;from thenbsp;European Union.nbsp;The ILO will nownbsp;shift its focus towardsnbsp;supporting the NSSF andnbsp;socialnbsp;partnersnbsp;innbsp;its successful and timelynbsp;implementationnbsp;- the next significant challenge in this endeavour.
nbsp;
nbsp;
=============