The pension and social protection system law issued three years ago has not yet come into force, despite the formation of a new board for the National Social Security Fund.
Bashara al-Asmar, chairman of the National Social Security Fund's board of directors, announced that Law 319 of 2023, which establishes the pension and social protection system, requires the issuance of 14 implementation decrees before it can begin. The former labor minister noted that the law's launch had been awaiting the formation of this board.
Al-Asmar said the most important decrees following the establishment of the board of directors is a decree creating the fund's investment committee, and that committee members will be subject to evaluation by the Civil Service Council. He added that the law defines cooperation between the investment committee, the board of directors, and the investment manager.
The labor minister has begun the necessary procedures to implement this decree and has opened the call for applications to form the committee, and is researching the funds and property owned by the social security fund to ensure the law's launch.
Al-Asmar said the current phase will take months extending into the beginning of next year, and
we will strive to be able at the beginning of 2027 to transition to this system
The system's beneficiaries are divided into categories by age. Insured persons aged 49 years or younger and registered in social security are mandatorily required to join the new system.
Insured persons aged between 49 and 58 years who have completed 15 years of service have two options: joining the new system or receiving severance compensation.
Insured persons over 58 years of age have the choice between remaining under the end-of-service compensation system or choosing the new system, which cannot be abandoned within one year of its implementation.
If an insured person reaches 64 years of age and has not withdrawn their compensation and has completed 15 years of service, they can receive a pension instead of end-of-service compensation.
Al-Asmar clarified that
the law does not apply retroactively
meaning that those who retired before the law's actual implementation will not receive a pension.
The new system provides three benefits: a retirement pension, a disability pension, and a pension for the insured person's dependents. The retirement pension has two guarantees: a percentage of the minimum wage starting at 55 percent after 15 years of service and reaching 80 percent, and a percentage of declared average wages at a rate of 1.33 percent for each year of service.
According to calculations from sources, if the minimum wage is 28,000,000 Lebanese pounds and the service period is 15 years, the first guarantee amounts to 15,400,000 Lebanese pounds. As for the second guarantee, if we assume an average wage of 90,000,000 Lebanese pounds and 35 years of service, it amounts to approximately 41,850,000 Lebanese pounds.
The law requires an annual reassessment of pensions according to a price index and wage rates. The basic conditions for entitlement are reaching age 64 and contributing for at least 15 years, otherwise the insured person receives a lump-sum compensation. Early retirement results in a pension reduction of half a percent for each month before the legal age.
The system covers mandatory sectors such as private sector employees and state employees, and optional sectors that can be joined by decree. Contributions are distributed among the employee, employer, and state, with details to be determined by decree.
The law allows workers outside Lebanese territory to join the system and benefit from its provisions according to conditions and criteria to be determined later.
