Egyptian pensioners cancelled a planned demonstration this week after Prime Minister Ibrahim Mehleb met with the head of the Pensioners Union, the secretary-general of the Pensioners Syndicate, and the minister of social solidarity in an effort to find a solution to the pensioners' demands. Al-Badri Farghali, head of the Pensioners Union, told Al-Ahram Weekly that the pensioners' demands could be summarised under the heading of improved living standards. “Pensioners feel humiliated. We have the right to live in a better way,” Farghali said. At the top of the pensioners' demands is the application of a minimum rate for pensions, guaranteed under article 27 of the new constitution. Farghali pointed out that the current social insurance law stipulates that the minimum rate for pensions should be equivalent to 80 per cent of the minimum wage. “But five million of Egypt's nine million pensioners receive monthly pensions of less than LE500,” Farghali said. For those whose pensions are above the minimum rate, a 20 per cent bonus was also requested. The problem of workers who reached pensionable age after June 2013 and are receiving monthly compensation of just LE60-70 was among the problems the prime minister promised to address at the meeting. “The problem emerged in June 2013, when law 135, which sets the minimum pension rate at LE291, was canceled,” Farghali added. In response to the pensioners' request during the meeting, Mehleb decided to change the board of the Pensions and Social Insurance Authority to include representatives of pensioners. Mehleb also promised pensioner representatives that a meeting would be held soon with the ministers of social solidarity and finance to discuss ways of providing the funds to cover their demands. Farghali said that the main demand of the pensioners was receiving what they felt they were owed from private and public insurance funds kept at the National Bank for Investment (NIB), a state-owned bank which manages public funds. According to law 119/1980, pensions and insurance funds were made to deposit their surpluses with the NIB. According to NIB regulations, the government, represented by the finance ministry, was able to borrow pensioners' cash from the bank at a 4.5 per cent interest rate. In 2005, the funds were placed under the control of the Ministry of Finance, run at the time by former minister Youssef Boutros Ghali. Several observers claimed that the ministry had used the pensions and insurance funds to finance the state budget, an accusation the ministry denied. Public and private pension funds now under the supervision of the social solidarity ministry are creditors to the ministry of finance. The exact sum of the accumulated pension and insurance funds dues has never been officially revealed. The Pensioners Syndicate has claimed that the government owes pensioners LE600 billion, as the NIB had lent this amount to state agencies and had not provided pensioners with the amounts owing to them. Farghali told the Weekly that the funds were estimated at LE540 billion, without the interest, while the government has admitted to only LE200 billion in debts to the pension and insurance funds. Over the last five years, the finance ministry has issued two eight-per-cent sukuk (Islamic bonds) to guarantee the LE200 billion debt. The interest payable has added LE17 billion to the original debt. To help the government finance the increase in the pensions of government workers by 10 per cent effective since January 2014, the government also issued treasury bonds worth LE14.2 billion in November 2013.
