Magharebia (Washington DC)

28 March 2014

Tunisia to Raise Retirement Age

Photo: Nina_pic/Flickr
Tunisia

Tunis — Days after announcing plans to raise the retirement age to 62, the Tunisian government on Friday (March 28th) named Rachid Barouni to head the national social security fund (CNSS).

Barouni takes the post amidst controversy over the proposed retirement policy reform. While the measure aims to counter a shortfall in social funds, concerns grow that it could impact many citizens, especially unemployed graduates.

But raising the retirement age by two years is a necessary step, according to Social Affairs Minister Ahmed Ammar Youmbai.

"The social funds deficit hit the 220 million dinar mark in 2012," Youmbai told lawmakers on March 17th.

"I expect it to reach 400 million dinars in 2014, and therefore, it has become necessary to raise the retirement age to 62 from 60 years as an urgent measure to overcome such a deficit," the minister added.

If approved, the decision to increase the retirement age would take effect in January 2015.

Citizens wonder if the government is serious about implementing the plan, especially as the number of unemployed people grows every day.

The problem did not arise overnight. According to analyst Khaled Zdiri, the revolution influenced the fiscal balances of the social security fund.

"The demobilisation of a large number of workers after the closure of many institutions, as well as the number of retirees compounded from year to year, versus a limited number of assignments... led to the worsening of the fiscal deficit of the social security fund," he noted.

Tunisia was compelled, he said, to "prepare a plan for structural reform of the pension systems in both the public and private sectors, so as to enable these systems to fulfil their obligations".

A team of financial experts should also be appointed to "manage the fund's investment reserves in an efficient and effective manner", he suggested.

Tunisians on the verge of retirement are voicing concerns over what the proposed change will mean for young people.

"It's true that social funds are facing problems, but raising the retirement age will aggravate the suffering of many university graduates and deny them the chance to replace those who retire," said Mokhtar Dimassi, a teacher in his 50s.

"I was planning an early retirement," bank employee Sihem Matoussi told Magharebia. "I thought that my decision would give a chance to an unemployed person to replace me."

She added, "I hope this plan will not go through."

Her colleague Abdelkader Samaoui was equally critical of the measure.

"We may not be sent to retirement, but to the nearest grave," he said.

Tunisian General Labour Union (UGTT) social fund head Abdelkrim Jerad tried to calm concerns.

"The condition of funds is not catastrophic and it's not about to go bankrupt, as promoted by some former officials," he said. "These funds are public and the state is their guarantor. Therefore, there's no fear about retirees' pensions."

According to former interim CNSS head El Hedi Boubker, savings are sufficient to cover pensions for the next 13 months.

However, international social security experts say social funds need savings covering at least 36 months in order to meet their obligations.

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InFocus

Tunisia Raises Retirement Age

Tunisia

A shortfall in social funds has forced the government to increase the retirement age to 62 years but this move is raising concerns that it may have a negative impact on unemployed ... Read more »