GCC Pensions and Social Security Workshop concludes in Doha


Abu Dhabi, 25 October 2003: Senior GCC pensions and social security officials warned of the growing negative effects of early retirement programs on GCC economies at the recently concluded workshop, “Impact of early retirement on the financial status of the GCC pension and social security funds”. The workshop was organized by the Secretariat General of the GCC countries, in cooperation with the Qatari Civil Affairs Ministry.
 
The consensus amongst the GCC officials was that facilitating and/or encouraging early retirement would further burden social security and pension funds, by shifting their existing clients from active contributors to consumers of the reserves. Since pension and social security programs in the GCC countries are funded to a large extent by their respective Governments, the burden will be transferred to those governments.
 
Commenting on the workshop and its outcome, Mr. Abdul Rahman Al Baqer, Deputy General Manager of the General Pension and Social Security Authority and Head of the UAE Delegation said; “The two-day workshop witnessed the discussion of many important issues focussed on pension requirements and the consequences of early retirement in general and on women in particular”.
 
“It was generally agreed that the drawbacks of early retirement exceed its positive effects. Hence all GCC countries must work together to discourage early retirement. Early retirement may be an effective tool for highly populated countries. It would help clear the way for new and qualified young graduates to enter the labour market,” added Mr. Al Baqer. “Such programs however, would severely impact the financial status of the GCC Social Security and Pensions funds, which would literally drain out because of the huge, long term commitments to their clients. This, in turn would negatively affect quality of services provided”, he added.
 
An overdependence on early retirement schemes would make it impossible for social security and pension funds to benefit fully from the full subscription period when the insured reach the standard retirement age of 60. This would deprive them of the potential investment opportunities as well. Moreover, such programs would have a negative effect on the GCC nationalization programs by removing qualified expertise from the labour markets.
 
“GCC pension officials discussed the effect of early retirement on women as well, explaining that such programs have a negative affect on the participation of women in the economy and prevent them from assuming leadership positions”, Al Baqer explained.
 
During the closing session, participants stressed the need to revisit early retirement programs across the GCC. They recommended changing the terms by linking these programs with a minimum age, which should not be less than 50 years, and restricting the combining of early retirement salary with other salaries, to those who abide by specific rules and regulations.
 
-Ends-
 
Note to Editors:
About the General Pensions and Social Security Authority (GPSSA):
The GPSSA was set up by the Federal Decree No. 7 of 1999 under a law issued for wages and social insurance. Its aim is to provide insurance for the protection of the national labour force and to create financial security for citizens. The institution will ultimately be self-funded, will operate as an independent, efficient corporate and offset the financial burden to the UAE Government.
 
The GPSSA plays a major social and humanitarian role to guarantee steady future income for nationals, their families and children. Currently, it emphasizes on interaction with large public and private organizations to increase awareness of the UAE Governments efforts to provide every national with a healthy and secure lifestyle.
 
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© Press Release 2003