Government Insurance Fund Financial and Administrative Violations Are Limited and Detected by Staff Themselves

NOSI's Administrative Structure Sectors Will Increase Following Merger of Two Funds

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Government Insurance Fund Financial and Administrative Violations Are Limited and Detected by Staff Themselves NOSI's Administrative Structure Sectors Will Increase Following Merger of Two Funds Wages and Incomes of the Two Funds Workers Will Be Raised 300% within Two Years The recently reported financial and administrative violations by staff members of the National Organization for Social Insurance (NOSI) Government Fund are only few and limited cases, which have been on reports of control agencies, said Dr. Mohammed Moiet, the Deputy Minister for Social Insurance and Pensions, pointing out that the said violations do not affect other staff members or top management of the Government Fund. An inquiry into irregularities has been called for by members of the Fund staff themselves, he added. Social Insurance Funds for public and private sectors are being merged under Law 207/1994 which stipulates that National Organization for Social Insurance (NOSI) replace The National Organization for Insurance and Pensions (NOIP) in the functions set forth in Social Insurance Law No. 79/1975, he added. This decision was taken due to the inability of either fund to serve the customers of the other. The merger should provide for easier access to both bodies regardless of affiliation. In addition, it will increase the efficiency and effectiveness of services provided for pensioners and the insured. On the other hand, the geographical reach of Government Fund offices is very wide, compared to that of public and private sectors. Therefore, it could be used to better serve all NOSI customers who would not be forced to travel far to get the service; especially since many of them are elderly people who might not be able to afford it. The merger plan aims to achieve greater flexibility in the unified organization structure, so that workers of both Social Insurance Funds would accommodate the envisioned expansion of the working system in the future, he noted. The merger strategy seeks to avoid any negative impact on NOSI's employees, including salary reductions. On the contrary, salaries and packages of NOSI's workers have been restructured to allow for the maximum benefits available to the two funds. In preparation for the merger process, total salaries have been raised by 200% to 300% during the last two years based on the Board of Directors' approval. The number of administrative structure sectors has also been raised, and accordingly staff promotion opportunities were multiplied, Moiet added. Insurance funds are the rightful property of pensioners. Neither the Minister of Finance, the Prime Minister, even the President of the Republic or any other authority, has any power to use such funds for other purposes. Article 9 of the Social Insurance Act No. 79/1975 stipulates that "the National Organization for Social Insurance has an artificial personality and a special budget directly set aside from the State budget, and that it is subject to the rules and regulations applicable to national institutions. The Central Auditing Organization (CAO) regularly audits the funds of the National Organization for Social Insurance, while the Board of Directors approves its budget only after CAO review and approval".  Dr. Moiet also pointed out that insurance funds are complete and safe; they are being invested in a number of different channels, as shown in the following table:   Investment Channel Amount Invested (in millions of pounds) Percentage Government bonds 23.749 5.5 % Securities 9.783 3.2 % National Investment Bank 59.986 14.0 % Ministry of Finance Instruments (8% annual coupon, paid monthly) 203.248 47.0 % Banks Deposits 7.731 1.7 % Investment Fund Documents 3.443 0./8 % Ministry of Finance Indebtedness 122.000 28.4 % Total 429.670 100 %   The above figures show that the Organization's funds are independent from the Ministry of Finance and that its investments in Ministry of Finance instruments are similar to those of any other investor. The Ministry of Finance issued two instruments valued at LE 198 b (with an 8% annual coupon, paid monthly) to overcome the problems faced by NOSI with the National Investment Bank (NIB). These included a lower interest rate compared to market rates, and the use of the return on investments to raise the amount of debt without compensating NOSI. The Ministry of Finance's instruments, however, provided NOSI with annual cash returns amounting to more than LE 16.5 b, the Deputy Minister said. The Ministry of Finance's debt is now close to LE 122 b. A committee of the Ministry of Finance and NOSI members has been created to examine ways to settle this debt, Dr. Moiet explained. (Source: Ministry of Finance)