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The retirement age for public sector employees is set to be raised to 68 for many reasons, and lawmakers are moving forward to make this happen.
Two bills have been put forward to implement this change. One comes from the Democratic Gathering bloc, and the other by three MPs from the Change Coalition, namely Waddah Sadek, Michel Doueihy and Marc Daou.
According to the current Lebanese law, the retirement age for both men and women is 64, although women have the option to retire as early as 60 if they wish.
However, there are exceptions for judges and military personnel. Under Lebanon’s judicial law, judges retire at 68. For military personnel, the retirement age depends on their rank, with higher-ranking officers retiring later.
A Crisis Period
During economic and financial crises, governments often turn to pension reform by delaying the retirement age for public sector employees. This measure has the potential to reduce pension system costs by extending the contribution period while shortening the period of pension payments.
In Lebanon, such an initiative could alleviate financial strain for public sector employees, whose end-of-service benefits have significantly dwindled. It would also allow the government to replenish the funds of the National Social Security Fund (CNSS) and offer a fair solution to the issue of salary devaluation in the public sector.
It should be noted that despite a 98% devaluation of the Lebanese pound, the salaries of civil employees have not been adjusted upwards. As a result, their end-of-service indemnities are still calculated based on an exchange rate of LBP 1507.5 per dollar, typically resulting in indemnities of around $6,000 after 25 years of service, at the current exchange rate of LBP 88,000 per dollar.
As for the CNSS, it has invested its funds in Treasury bonds. However, since Lebanon defaulted on its debt, these securities have significantly depreciated.
Age Diversity
The Democratic Gathering bloc advocates for a diversified retirement age policy, based on the retirement systems of judges, military personnel, and other systems observed in some countries in the region. The suggested amendments include:
* Fourth and fifth category employees would retire at the age of 66.
*Third and second category employees would retire at the age of 68.
* In all instances, employees would be free to claim their retirement rights at the age of 64.
In fact, the Democratic Gathering bloc stresses on the importance of executives’ “experience” for better performance in the public sector. Additionally, it emphasizes potential fiscal savings for the state and highlights the constraints faced by officials in appointing public sector’s employees amid the country’s current political context.
The Lebanese University’s Professors
The bill put forward by the Change Coalition MPs pertains to professors at the Lebanese University (UL). This proposal advocates for a specialized retirement plan for these educators for the sake of “equal treatment among the civil sector’s employees.” Given the qualifications required for teaching positions at the Lebanese University, faculty members often struggle to gather the required twenty-five years of service to qualify for retirement pensions under existing laws.
In their proposal, the three MPs highlight global university trends and refer to AUB’s (American University of Beirut) amended 2016 internal regulations, which allow professors to continue teaching and conduct academic research as long as they can. They also mention the internal regulations of the Arab University, where the retirement age for professors is set at 72 years.
Life Expectancy
Today, it has become crucial to adjust the retirement age based on Lebanon’s life expectancy. According to data from the World Health Organization (WHO), the Lebanese population’s life expectancy rose from 61 years in 1964 to 67 years in 1976, and further to 78 years in 2014. Raising the retirement age could reduce the number of retirees and help slow down the growth of their dependency ratio.
Controversial Proposal
Raising the retirement age is definitely a controversial proposal. Caretaker Minister of Youth and Sports Georges Kallas has already expressed his opposition, arguing that it decreases job opportunities for recent graduates. While the public sector certainly relies on its senior employees, it also needs to undergo reforms to weed out “ghost jobs.”
