Senior Gulf Cooperation Council (GCC) pensions and social security officials warned of the growing negative effects of early retirement programs on GCC economies at a recent workshop.
The Impact of Early Retirement on the Financial Status of the GCC Pension and Social Security Funds workshop was organized by the Secretariat General of the GCC countries, in cooperation with the Qatari Civil Affairs Ministry.
The consensus amongst the GCC officials was that facilitating and/or encouraging early retirement would further burden social security and pension funds, by shifting their existing clients from active contributors to consumers of the reserves. Since pension and social security programs in the GCC countries are funded to a large extent by their respective governments, the burden will be transferred to those governments.
An over-dependence on early retirement schemes would make it impossible for social security and pension funds to benefit fully from the full subscription period when the insured reach the standard retirement age of 60. This would deprive them of the potential investment opportunities as well. Moreover, such programs would have a negative effect on the GCC nationalization programs by removing qualified expertise from the labor markets.
During the closing session, participants stressed the need to revisit early retirement programs across the GCC. They recommended changing the terms by linking these programs with a minimum age, which should not be less than 50 years, and restricting the combining of early retirement salary with other salaries, to those who abide by specific rules and regulations.
The General Pensions and Social Security Authority (GPSSA) was set up under a law issued for wages and social insurance. Its aim is to provide insurance for the protection of the national labor force and to create financial security for citizens. The institution will ultimately be self-funded, will operate as an independent, efficient corporate and offset the financial burden to the United Arab Emirates (UAE) Government. — (menareport.com)
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