News

Egypt: New insurance law will take into effect as of January 2020

2019-08-24

Local media reported that the new pension insurance law will come into force on January 01, 2020. This was announced on the sidelines of the 'Insurance Law: How long?' Conference organized by the Office union services last Wednesday.

The experts at the conference explained that the law has brought positive points in the sense that it provides a new mechanism for annual increases in pensions; thanks to this law, pensions will experience annual increases equal to inflation rates and not exceeding 15%. Experts added that, for periods, inflation rates can reach 30 % and 33% indicating that it is positive but insufficient.

In addition, the current law has not taken into consideration the issue of informal workers and has created difficult conditions for early retirement. Among these conditions is the question of 25 years of insurance contributions, while those who retire early are deprived of the duration of purchases.

The experts also indicated that the burdens caused by this law are intended to undo the general pension fund claiming that any law on insurance requires independence of the administrative board of the body that manages the money and does not tolerate any intervention of the supervisory minister's share of all matters relating to the management of the investment fund.

They explained that some articles of the law are contrary to some articles of the constitution and cause difficulties for pensioners. Experts cited the example of the article that raises the retirement age from 60 to 65, which may increase the unemployment rate in the ranks of young people. He added that the new law has canceled the end-of-service bonus that has been applied since 1984 and has become a legitimate right. On this issue, the new law has increased the length of service from 20 to 25 years to get the right to early retirement.

Moreover, the new law on insurance canceled the right to buy durations to improve the pension and made the pension regulation become a kind of average wages obtained throughout the years of service is the average salary for the last two years of service, which means that pensions are low since, generally, wages in the first years of service are not significant.