10 facts about the new Social Security and Pensions Act

CAIRO – 20 July 2019: Egypt's new Social Security and Pensions Act is highly considered one of the top highlighted acts that the Parliament ratified during the recent period, becoming part of the 2019/2010 general budget.

In this regard, Egypt Today sheds the light o 10 of the most important information about the new 2019 Social Security and Pensions Act.

1- The new act sets a minimum pension of 65 percent of the minimum wage of the social insurance subscription.

2- Pensions will rise by up to 15 percent on a yearly basis.

3- Injury pensions for workers who do not receive salaries like industry students and apprentices will increase from LE10 to the minimum amount of pensions.

4-The act integrates the social security law and pensions law into one social security act.

5- The new social insurance law contributes to the dissolution of financial interrelationships between the National Authority for Social Insurance, the State Treasury and the National Investment Bank.

6- The Social Insurance and Pensions Act approved allocating incentives for including irregular workers into the social insurance system.

7- According to the new Social Insurance Law, a unified fund will be established for all insured groups.

8- For the first time, unemployment benefits are provided in the Social Insurance Law. Unemployment benefits are financed by the employer's share of 1% of the insured's monthly wage, in addition to the investment income of the insurance money.

9- One of the advantages of a unified Social Insurance and Pensions act is merging pensions and wages to equal the minimum pension.

10- The Act also aims at raising the age of retirement to 65 by the year of 2040, as this age will gradually be raised starting 2032.

The new legislation also sets out a plan to rise the retirement age as a way to address the financial and actuarial deficit in the pension system, and to reduce the burden on the public treasury.

The Parliament on Monday granted its final approval to the Social Security and Pensions Act, which will see 21% of public and private sector workers’ salaries going towards a newly-established pension fund.

The percentage taken out of employee salaries will increase 1% once every seven year until it hits 26%. The law will also require the fund to provide quarterly and annual financial reports to the presidency, cabinet, and parliament for transparency purposes.