Revising Pensions

[Yusuf Mansur]

It seems imperative that amongst the harsh measures the government is considering, one should involve a scaling down or even the complete removal of the pensions of former ministers, prime ministers and members of Parliament. With the majority of them being technocrats, wealthy and non-politicians, for starters, the country is basically throwing this money away.

In countries where elected officials receive pensions, such pensions customarily start at the retirement age, around 65 years in most countries. In Jordan, the ministerial and Parliamentary pensions start immediately after leaving office, which is frequent. Given that the majority of those appointed are young, their pensions become a coveted cushion for life. And given the frequency of change, such pensions add up.

The entire idea of rewarding Parliamentarians is not right in Jordan. First, it was admitted that several of the elections were rigged, hence even the supposedly voted ones were not really voted into office, and the ministers are not elected either. Second, a lacklustre performance should not be rewarded in any type of organisation. Third, given the duration of service, a lifetime pension for serving a few months (we have had 62 Cabinets in 66 years) seems a luxury that we should shed.

Of all these reasons, the last one should be decisive. Consider that one of the last five councils of ministers was appointed for less than two months (50 days). For this short service, let us say a minister receives JD3,000 per month immediately after leaving office (includes medical insurance and some added benefits). Given an average age of 45 years (I am being generous, some are much younger than this), and a life expectancy of 70 years, the person will receive a total payment of JD900,000, which is equivalent to JD18,000 per day for serving as a minister. Thus, Jordan rewards its ministers more than any other country in the world, including its donors.

We have close to 500 former ministers, a high number by any standard. Some are extremely wealthy and definitely not in need of a government pension. The monthly cost of these retirees’ compensation package comes close to JD1.5 million per month or JD18 million per year.

The cost of the 15 retired and living prime ministers is JD1.6 million (JD9,000 per ex-prime minister per month). Also, almost none of these former prime ministers needs his/her pension. Hence, why not do away with it at a time of austerity, when the government is deciding upon difficult options such as removing all subsidies and directing them at the needy?

The annual cost of the retirees from the executive branch of government is thus close to JD20 million. Both ministers and prime ministers could easily afford doing away with their pensions; having served the country for varying time periods should prompt them to be the first to sacrifice for Jordan.

The same argument applies to members of Parliament, who now receive pensions of JD3,000 per month each. For the 180 members, this brings the annual pension cost to JD6.5 million. They, too, can forsake their pensions; if they do want pensions, these should start at the age of 65, not immediately after leaving Parliament. Again, most of these Parliamentarians are young, wealthy and may have other businesses they attended to even while serving their terms.

Seriously speaking, why not start all these pensions at the good age of 65, instead of asking Jordan’s most talented to retire so early? After all, Jordan’s human capital is a terrible thing to waste!  Jordan Times 23/10/2012