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publication April 5, 2021

Jordan - Social Security Corporation (SSC): Toward Coverage Expansion and a More Adequate, Equitable and Sustainable Pension System


The note presents an overview of the challenges and opportunities that Jordanian policymakers could consider when discussing a strategy to expand coverage of social security, with adequate, sustainable, and equitable financing mechanisms, which is also in line with long term fiscal sustainability. The paper focuses on the pensions program of Social Security Corporation (SSC). Even with recent reforms, the system still faces a risk of financial unsustainability, given the current design (parameters, and qualifying conditions), the increased longevity of retirees, in addition to the decrease of the formal labor force participation. 

The aim is to help decision makers to look beyond short-term measures, and quick fixes, and to look more into a long-term strategy to expand coverage avoiding transferring the financial burden of the system to the next generations. The current COVID 19 crisis has put in evidence some of the weaknesses of the current social security system and the urgent need to increase effective coverage to the informal sector. Expanding social security coverage would require more diversification of pillars. Jordan has now an important window of opportunity to reform further its pension program, with this ultimate aim to expand the coverage of good quality pensions –where good quality is defined as pensions that create a balance between sustainability on the one hand and adequacy on the other, without creating inequities, or other distortions, and which are delivered in an efficient way in terms of costs, investment returns and labor market impact.