CAIRO: In an interview on primetime show “Egypt Today,” Ministry of Finance Youssef Boutros Ghali discussed the draft pension and insurance law which elicited mixed reactions when it was proposed at the People’s Assembly last April.
Ghali explained that citizens at 65 or above will receive a pension of LE 100 whether they have subscribed or not to receive it, all they have to do is present a social security ID.
Once the law is approved, 2,700,000 citizens will have their pensions increased as the law triples the pension of those who receive LE 50 to LE 150. He continued that those who receive a pension of LE 350 will also get an increase.
In response to accusations that the ministry invests the pension money in the stock market, Ghali said that they will not jeopardize the budget of LE 365 billion which benefits 9 million citizens.
Furthermore, the new law permits any citizen to sue the pensions authority.
Ghali also explained that those who retire under the age of 48 will receive a lower pension, to discourage early retirement since it is not fair for someone to receive a pension when he or she is able to work.
The retirement age was raised five years to 65, and those who retire at that age will receive a pension that totals around 70 to 80 percent of their salary.
This Unified Social Insurance and Pensions draft law also calls for a comprehensive review of the current insurance system, which provides benefits to more than 16 million Egyptians.
The draft law also stipulates a LE 20,000 fine or a one-year jail sentence to employers who do not insure their employees.
The law also stipulates an unemployment benefit, to be given to job seekers for a period of six months, said Ghali.
Ghali had previously said that once the People’s Assembly approves the law, it will be executed as of January 2012, and that it will apply to all workers in Egypt with no exceptions.
"The new law develops new mechanisms for the management and safe investment of insurance funds," said Abdel Fattah Al-Gabbal, an analyst at Al-Ahram Center for Political and Strategic Studies.
He added that if approved, the law will greatly contribute to increasing the value of savings, thus creating additional funds for the state to close the current budget deficit.
