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Pension System in Egypt…Facts and Gains

Pension systems are considered one of the main tools in achieving social protection in all countries, especially the developing world, and it is one of the tools of economic and social policy adopted by countries because of its social and economic effects on the individual and society, it aims to ensure a decent life for a large number of groups of society and meet their basic needs.

Since 2014 until now, the pension system in Egypt has witnessed many developments that have made it capable of providing social protection, as it has increased successively and exceptionally in light of successive economic crises and rising costs of living, within the framework of the state’s keenness to achieve social protection for the most needy groups and improve their economic conditions. and social life to enable them to live a decent life.

In this context, the strategic forum for public policies and Development Studies “Derayah ” presents this research paper, which relied on the inductive approach in addressing the reality of the pension system over the past 9 years, where it highlighted pension systems, fundamental legislative reforms and executive decisions that contributed to improving the conditions of pensioners, and giving them a set of gains and benefits that had a tangible positive impact on their lives, through the following four axes:

The first axis: pension systems in Egypt

The second axis: legislative reforms and executive decisions to improve the pension system

The third axis: the gains of pensioners from 2014 to 2023

The fourth axis: the impact of those gains on pensioners

The research paper has reached a set of results, the most important of which are:

-The state has succeeded in providing the necessary financial liquidity to serve pensioners since the signing of the financial entanglement agreement between the National Authority for social insurance and the state treasury, according to which about 45 trillion pounds will be paid to the authority over 50 years from 2019
-The government’s contributions to pension funds increased from 29.2 billion pounds in 2013-2014, to 202 billion pounds in the budget of the current year 2023-2024, an increase of about 592%.
-The value of pensions increased 10 times during the period from 2014 to 2023, and the value of pensions disbursed increased from 86.5 billion pounds in 2013/2014 to 340 billion pounds in 2022/2023, an increase of 293%.
-The minimum and maximum value of the severance pension has witnessed a significant increase, with the minimum in 2023 reaching about 1.275 pounds compared to 450 pounds in 2015, and the maximum 10.355 compared to 2.360 pounds in 2015.

-The “Social Security ” pension allocations increased to reach 31 billion pounds in the 2023/2024 budget, compared to 22 billion pounds in the 2022/2023 budget, and 19 billion pounds in the 2021/2022 budget.
-The increase of the Takaful and Karama pension during 2023 reached 40%, as the president of the Republic decided to increase it by 25% in March, and 15% in September, so that the “Takaful” pension would rise after the September 2023 increase to reach 630 pounds instead of 450 pounds, and the “Karama” pension for the elderly and people with disabilities reached 490 pounds instead of 350 pounds.

The first axis: pension systems:

The pension map was characterized by complexity and diversity, as its types varied as follows:

1: insurance pension

-It is a pension system based on contributions from subscribers for more than half a century, specifically since the 1960s. It has developed greatly over the past decades and played an important role in protecting large sectors of Egyptians, especially those who work in the formal sector, as its umbrella extended to a large number of citizens. Whether directly (the insured and the pensioner) or indirectly (family members).

-Workers are entitled to a social insurance pension after they pay insurance contributions for a specific period determined by the regulating law. These contributions are collected in insurance and pension funds, which subsequently provide the amounts of due pensions. The resources of these funds are the insurance contributions, the interest due thereon, and any profits resulting from investing the money in those funds. .

-The government allocates annual support to these funds from the state’s general budget to cover any deficit in collected contributions, and to finance the increases due to pensions, which are issued by law from the House of Representatives, or by a decision from the President of the Republic if the House of Representatives is not in session.

2: Social pension

-It is a security pension that is conditional on the social status of the citizen, and is not based on financial contributions, meaning that it is not financed through wage deductions. It is granted to poor families in accordance with the controls stipulated by the law. It may not be combined with any other type of pension, and its value is determined based on the number of pensions. Members of the beneficiary family.

The services of the social security system in Egypt include:

– Monthly security assistance, which is disbursed to poor families according to the study of the economic and social situation of the family, and the value of these assistance varies according to the number of family members.
– Exceptional assistance, which is a one-time assistance during the year for families benefiting from the Social Security Law, and is allocated for educational expenses, and its value varies from one stage of study to another, including exceptional assistance also funeral expenses, status expenses and urgent emergencies.
– A child’s pension, which is a pension issued to a child up to the age of 18 and in specific cases, namely orphaned children or children of unknown parentage, children of a breadwinner or divorced mother if she marries or dies, children of legally detained, imprisoned or imprisoned for at least a month.
– The monthly scholarship that is provided to the children of the beneficiaries of the guarantee assistance.
– Security projects to help engage in the labor market.
– Compensation, which is very diverse, and deals with disasters that affect citizens, whether individual or collective, such as desertification and others.

3: irregular employment pension

-The social insurance and Pensions Law 148 of 2019 included irregular employment of people without regular salaries in social insurance in exchange for paying 9% of the minimum wage, and those who wish to receive a pension with a minimum of 900 pounds, must register himself at the competent insurance office, and pay 72 pounds per month.

-A worker belonging to the category of irregular employment is entitled to a pension after reaching old age, with a contribution period for old-age, disability and death insurance of at least 180 months (15 years), including a contribution period of at least 120 months (10 years).

-According to the new social insurance law, the total pension for irregular employment may exceed 80% of the maximum contribution wage on the due date, and not less than 65% of it, in accordance with the new insurance and Pensions Law.

-According to the law, the categories of the labor force of irregular employment, include the following:

-Memorizers of the Holy Quran and reciters

-Domestic servants and the like

-Deportation workers

-Temporary workers in agriculture both in fields and orchards

-Workers in livestock or small animal and poultry farming projects

-Owners of built-up real estate whose share of the annual income is less than the category of the minimum subscription wage

-Non-possessor owners of agricultural land whose ownership is less than an acre

-Hymnists and other servants of the church

-Small self-employed people such as street vendors, car clubs, newspaper distributors, traveling shoe wipers, and other similar categories.

-Holders of agricultural land whose holding area is less than an acre, whether landlords or tenants by rent.

4: Private sector pension

Law No. 148 of 2019 and its executive regulations obligated the employer to pay the contributions due for his workers, and to submit an insured subscription application within two weeks of any worker joining his job. The law stipulates that the worker reaches retirement at the age of sixty. It also specifies cases in which the retirement age may extend beyond the age of 60 years, and stipulates that the worker is entitled to the period of his work after the age of sixty.

5: Exceptional pension

The exceptional pensions issued by Law No. 71 of 1964 mean either granting an exceptional pension to someone who has not previously received a pension, or improving the pension of someone who has previously received a pension.

The categories benefiting from the Exceptional Pensions Law are:

1 – Civilian workers whose service in the state’s administrative apparatus, public bodies, public institutions, or economic units affiliated to them has ended, or for those whose families have died.

2- Those who performed great services for the country or the families of those who died.

3 – Families of those who died in an accident considered a public disaster.

6: Solidarity and dignity pension

The “Takaful” program is designed as a conditional cash transfer program that provides income to support poor families with children under 18 years of age. The assistance includes providing a monthly salary and providing health care for pregnant mothers and pre-school children.

As for the “Karama” program, it was designed as an unconditional cash transfer program for the elderly poor (65 years and over), and the disabled with a disability rate starting from 50% that prevents them from working and earning, and who do not have a fixed income.

The second axis:

legislative reforms and executive decisions to improve the pension system
The 2014 Constitution was filled with a number of articles that preserved the rights of pensioners. Article 17 was clear in its dealings with social insurance, social security, and providing a pension for irregular workers, as it stipulated: “The state shall guarantee the provision of social insurance services.” Every citizen who does not enjoy the social insurance system has the right to social security, which guarantees him a decent life, if he is unable to support himself and his family, and in cases of inability to work, old age, and unemployment. The state works to provide an appropriate livelihood for small farmers, agricultural workers, fishermen, and irregular workers, in accordance with the law.

Laws and executive decisions:

-Decree of the president of the Republic by Law No. 118 of 2014 on exempting establishments and insured persons from the additional amounts due to them to the National Social Insurance Authority
-The decision of the president of the Republic by Law No. 197 of 2014 to increase the planned rate of pensions in 2007 by 5% to 15% as of 1/7/2007 for pensions accrued before this date.

The decision of the president of the Republic by Law No. 120 of 2014 to amend the social insurance law to cancel the deprivation of early pensioners of the increase prescribed by Article 165 to improve low pensions, the amendment was retroactive from the date of 1/7/2013 and the disbursement of financial differences as of this date.

-Decision of the president of the Republic No. 190 of 2014 to increase pensions by 10% of the total pension due to the pensioner on 30/6/2014.
-Decision of the president of the Republic by Law No. 29 of 2015 to increase pensions starting from 1/7/2015 by 10%.

-Law No. 60 of 2016 increasing pensions by 10% as of July 2016 pensions accrued before this date.

-Decision of the Ministry of social solidarity No. 374 of 2017 on the rules for disbursing the pension increase established by Law No. 80 of 2017, provided that the increase should be by 15% of the total pension payable to the pensioner on 30/6/2017, and the minimum increase should be 150 pounds and the maximum 550 pounds.

– Presidential Decision No. 260 of 2021 to increase pensions, effective 7/1/2021, by 13%.

– Presidential Decision No. 139 of 2022 to increase pensions by 13%, effective April 1, 2022.

– Presidential Decision No. 187 of 2023 to increase pensions, effective April 1, 2023, by 15%.

-The President of the Republic’s decision to increase the exceptional cost of living allowance, to become “600” pounds, instead of “300” pounds, for all employees of the state’s administrative apparatus, economic bodies, business sector companies and the public sector.

-Implementing the rule of financial inclusion for pensioners and beneficiaries, and mechanizing the collection of insurance benefits by linking with the electronic collection and payment center at the Ministry of Finance, which saves time, effort, and speed of disbursement.

The third axis: the earnings of pensioners and their beneficiaries

We can review the most important gains of pensioners based on contributors’ contributions from 2014 until 2023, as follows:

The value of pensions increased 10 times during the period from 2014 to 2023, and the following table shows the percentage increases approved by the government in accordance with the announced annual increases:

The value of annual increases during the period from 2014 to 2023

We refer here to raising the minimum insurance subscription wage in January 2023 to be 1,700 pounds, compared to 1,400 in 2022, and 1,200 in 2021, and raising the maximum insurance subscription wage to be 10,900 pounds, compared to 9,400 in 2022, and 8,100 pounds in 2021.


yearNumber of beneficiaries in millionsThe value of annual pensions is in billions
2013- 20148.69386.5

The steady increase in the number of civilian pensioners in the period from (2014-2023) and its annual value in billions

As of October 1, 2023, the number of pensioners and their beneficiaries amounted to 11,117,382, and the number of Pension Disbursement outlets amounted to 9,556 outlets.

The minimum and maximum value of the severance pension has witnessed a significant increase, as the increases have evolved from 2014 to 2023 as follows:
– The minimum pension amounted to 450 pounds in 2014, while the maximum was 2082 pounds.

– The minimum pension reached 450 pounds in 2015, and the maximum 2360 pounds.

– The minimum pension reached 500 pounds in 2016, and the maximum 2680 pounds.

– The minimum pension reached 500 pounds in 2017, and the maximum 3040 pounds.

– The minimum pension amounted to 750 pounds in 2018, and the maximum to 3448 pounds.

– The minimum pension reached 900 pounds in 2019, and the maximum 4568 pounds.

– The minimum pension reached 910 pounds in 2020, and the maximum 5600 pounds.

– The minimum pension reached 900 pounds in 2021, and the maximum 6480 pounds.

– The minimum pension reached 910 pounds in 2022, and the maximum 7520 pounds.

– The minimum pension reached 1275 pounds in 2023, and the maximum 10355 pounds.

Social Security pension allocations increased to 31 billion pounds in the 2023/2024 budget, compared to 22 billion pounds in the 2022/2023 budget, and 19 billion pounds in the 2021/2022 budget.

The increase in the Takaful and Karama pension during the year 2023 amounted to about 40%, as the President of the Republic decided to increase it by 25% in March, and 15% in September, so that the “Takaful” pension increased after the September 2023 increase to reach 630 pounds instead of 450 pounds, and the “Karama” pension amounted to “For the elderly and people with disabilities, 490 pounds instead of 350 pounds.

Fourth axis: The impact of these gains on pensioners:

We can review the impact of the gains obtained by pensioners and their beneficiaries, as follows:

-The social protection plan approved by the Egyptian state since 2014 has contributed to the decline in poverty rates in Egypt to 29.7% in 2019/2020 compared to 32.5% in 2017/2018, with a decrease of 2.8%, which is an indicator of the success of the state’s efforts to achieve social justice in conjunction with the economic reforms implemented and focused on the social dimension of development.

-Assistance in providing citizens with a more balanced life at the psychological and social level, strengthening their sense of belonging, acceptance and acceptance from society and the surrounding environment, and keenness to integrate into society.

-An independent impact assessment conducted by the International Institute for Food Policy Research showed that the “Takaful and Karama” program had an impressive impact on women’s empowerment and economic inclusion, through a set of indicators, the most important of which were:

-Increase the consumption of families benefiting from Takaful from 7.3% to 8.4%, compared to families that do not participate in the program.

-Reducing by 12 percentage points the probability of families in the Takaful program slipping below the poverty line.

-A significant increase (from 8.3% to 8.9%) in the value of monthly food consumption for Takaful beneficiaries.

-The “Takaful” program has increased the rate of standard deviation of weight relative to height, which is a measure of the short-term nutritional status of children under the age of two, that is, a decrease of 3.7 percentage points in the likelihood that a child under the age of five has been treated for malnutrition, and has also led to a decrease in stunting and wasting rates, according to estimates of the demographic and Health Survey issued by the Central Bureau of Statistics in 2019.

-The program has also led to an increase in spending on the educational process of their children and the provision of school supplies and means of transportation to school, as the impact assessment indicators showed that 100% of the children of “Takaful” families are enrolled in schools, including 4.5 million children, including 50% at the primary stage, 20% at the preparatory stage, 9% at the secondary stage, in addition to 22% children under the age of Education.

-The “Takaful and Dignity” program has shown positive results related to the empowerment of women and their sense of dignity, with a decrease in financial pressures on the family, as we find, according to some statements by the minister of social solidarity, that 75% of Takaful and dignity card holders are women

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