Early retirement ‘counterproductive’ for workers and economy — experts

AMMAN — The various economic and psychosocial damages linked with early retirement entail revisiting regulations to restrict an early leave option originally designed for individuals working in hazardous jobs, experts agreed on Monday.

Participants in a session organised by the Social Security Corporation (SSC) agreed that early retirement is counterproductive at the individual and national levels, adding that leaving the labour market at an earlier stage decreases the total number of subscriptions, and, consequently, decreases the value of the early retirement pension compared to the old age retirement pension.

Also, when early retirees take on additional jobs, they prohibit young job seekers from finding employment opportunities. 

SSC Director General Nadia Rawabdeh described early retirement as a “growing phenomenon”, adding that early retirees comprise nearly half of the corporation’s 202,000 retirees.

This July, the corporation’s retirement pension’s bill amounted up to around JD76 million, of which nearly 60 per cent went to early retirement pensions, she added. 

The official cited a recent SSC actuarial study, conducted in partnership with the International Labour Organisation, which concluded that the corporation should increase both early and old-age retirement age in order to have sufficient monthly subscriptions that cover insurance dues over the long run. 

Munther Shara, former president of the Economic and Social Council, said early retirement directly affects the gross domestic product, citing studies that prove a “regression in the feeling of self-worth, as well as physical and mental health of early retirees”.

“Early retirement might seem beneficial at first glance, but its economic, social and health disadvantages have been proven,” he said at the session.

For her part, the Sisterhood is Global Institute Executive Director Asma Khader said all women, including housewives, have to be covered by the social security insurance, noting that the work that women do inside the house is “sacred”.

Economist Hussam Ayesh pointed to the fact that high percentages of retirees in any country drop its credit eligibility, a matter that makes a country less able to take loans, attract investments and integrate international markets.

“This is an issue of utmost importance for a country like Jordan,” he noted.  

Mahmoud Maaytah, director of the SSC’s research and studies department, said accumulative early retirement rates stand at 46 per cent of retirees, a figure that increased to 61 per cent in 2016.