NSSF in Lebanon agree on reduced employer payments
Within the context of reducing the cost of doing business in Lebanon and improving the competitiveness of the private sector, the National Social Security Fund (NSSF) agreed to a significant reduction in the share that employers pay to the fund. The government-sponsored proposal reduces employers’ contributions to the NSSF from the current 38.5 percent of an employee’s wages to 23.5 percent.
The plan’s proponents argue that cuts are possible because the fund has accumulated a surplus of more than $1.4 billion over the last 9 years. But labor representatives at the fund unanimously rejected the proposal, saying they object to currently unpaid benefits for employees, and fear that the fund will run down its reserves in just two years’ time if employers are allowed to pay less in contributions.
The NSSF collects contributions of 38.5 percent from employers and 3 percent from employees. The percentage paid by employers is allocated towards family allowances, end-of-service payments, and maternity and sickness. According to a report by the fund’s board, cuts are planned for the family allowances and the maternity and sickness funds. Currently, each accounts for 15 percent and will be reduced to 6 percent and 9 percent respectively. A reduction of the employees’ contribution from 3 percent to 2 percent is also planned, along with an upgrade in educational benefits and health services that would cover dental and eye care and emergency medical coverage.
The fund’s regulations require the proposal to win a majority within each group of delegates represented on the board, namely labor (10), business (10) and government (6). Labor’s rejection forced another vote in two weeks, when it only requires a simple majority of all 26 members. — ( Lebanon Invest )
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