Engineers syndicate says pension fund 'has not failed'

AMMAN — The Jordan Engineers Association (JEA) pension fund has not failed, JEA President Majid Tabba said on Monday, stressing that its profits from 2000 to 2014 stood at some JD143.6 million.

"The association invested in numerous real estate, industrial and educational projects, and if the fund incurred losses in some investments, it does not mean it has failed," Tabba told reporters.

"Over the past 30 years, the fund increased the book value of its assets from JD3.4 million in 1985 to JD203.5 million in 2014, achieving a growth rate of 5,885 per cent," the JEA president highlighted.

Fund data showed the total revenues — pension subscriptions and profits — over the past 15 years reached some JD331.4 million compared to JD152.06 million in expenditure on pensions and administrative spending during the same period.

Tabba also noted that the market value of the fund's assets in 2014 reached some JD335.9 million.

On Sunday, some JEA members refused to attend a meeting to announce results of a study on the fund, which was established in 1973, criticising the association's council for investing in "losing projects".

Raed Haddadin, vice president of the civil engineering unit at the JEA, told The Jordan Times that syndicate members were not part of the study and were not informed about it. 

"There was no discussion with members even about proposed solutions to address what the council claims are challenges [facing the fund]," Haddadin said, criticising suggestions to raise the retirement age.

The JEA's seventh actuarial study of the pension fund, released at the press conference on Monday, revealed that the fund reached a break-even point of equal pension subscriptions and pensions in 2014 instead of the expected year of 2017.

The fund will also reach a second break-even point — where pension subscriptions and investment profits would equal its expenditure — in 2019 instead of 2021 as concluded in the sixth actuarial study, according to the JEA.

The study also expected a third break-even point — where the total revenues would be equal to total expenditures — to be reached in 2028 instead of 2031 unlike what the sixth study forecast.

To avoid such early break-even points, the study recommended raising subscriptions gradually to achieve a balance between what beneficiaries pay and what the fund pays.

Another recommendation is raising the pension age, which the study supported by the rise in life expectancy — 77 years instead of 72 for men and 80 years for women instead of 73.

A third proposal is achieving higher revenues through finding new investment opportunities that could generate more permanent and continuous profits.

The JEA has 130,000 members, 40,000 of whom work abroad, Tabba said earlier this week.