Radwan: count of beneficiaries, and modifying their pension values, preparing for cashing pensions for 8 million people accordingly starting 1 August 2011

LE 2.8 billion is the cost of the 2008 social raise

Table of the due raises in pension values on 1 April 2008.

Armed Forces Supreme Council Chief, Field Marshal Mohamed Hussein Tantawi, issued a decree law no. 102 of 2011 stipulating amending law 114 of 2008 of granting a social raise to government employees and pensioners.

The new decree modifies the social raise of pensioners and their beneficiaries to 30% of the basic salary instead of 20% cancelling the previous maximum limit.

The decree is in implementation of the government policy of alleviating the burdens faced by pensioners and their beneficiaries, and increasing their incomes so that they can cope with requirements of living especially in the current political and economic conditions. It also reflects the policy of the Ministry of Finance which commits itself to demands of social justice, and implements the ruling of the Supreme Constitutional Court made in late 2008 concerning the 2004 raise. The court had judged that it is unconstitutional to set a maximum limit to raises of pensions citing the absence of such limits in raises to employees’ salaries in the government and public sector. No discrimination in dealing with citizens should be allowed especially when the purpose of the special social raise is to help citizens cope with the rising goods and services costs and the raise was financed by one source which was the state treasury. Aiming at alleviating the financial load borne by pensioners, the Ministry of Finance took the initiative to modify the 2008 raise by itself, saving pensioners the trouble of litigation before the Constitutional Court which could take further four years.

Egyptian Finance Minister, Dr. Samir Radwan, said the decree will benefit around eight million pensioners and beneficiaries at a cost of LE 2.8 billion borne by the public treasury. The sum was allocated in the new 2011/2012 budget which included LE 10.5 billion to cover the raises granted to pensioners in the new budget.

The Ministry, Dr. Radwan said, will continue its efforts to enhance the conditions of pensioners, as part of the endeavour of the government to ameliorate living standards of retirees and to accomplish social justice through gradual elevation of minimum limits of wages and pensions. The Ministry will soon declare a plan to introduce some reforms in pensions together with the necessary executive measures and the concomitant sources of financing.

Concerning the rules of putting the decree into force, Finance Minster Advisor, Dr Mohamed Moeet, said the value of pensions will be increased for eight million pensioners as the value of all basic wage pension on 30 April 2008 increased. The following table details the raise differences to be cashed starting 1 August 2011.

Dr Moeet revealed that this measure is part of the Ministry’s strategy to ameliorate pensions—a plan which it started to carry out in July 2010 through raising the pensions of around 3.7 million pensioners and beneficiaries whose pensions were less than LE 370 each. The state treasury bore the total cost of around LE 1.5 billion for the fiscal year 2010/2011 in the first implementation of the new social security and pension law, also setting the minimum pension limit at LE 160 monthly.

The public treasury, Dr. Moeet adds, will cover the cost of raising low pensions that will be settled in the new fiscal year and the coming years as well to put the provision of the new law into force. In addition, the treasury has already borne the cost of the last April pension raise by 15% of the total pension which amounted to a total of LE 6.5 billion for the benefit of eight million people.

The ministry is keen to establish equality and social justice among pensioners and state workers as the differences of the 2008 raise were settled at a cost of LE 2.8 billion for the eight million pensioners and beneficiaries within the efforts to alleviate the financial burdens of this sector of the society.