Introduction

Social security represents an institutional embodiment of intergenerational justice, the management of social risk, and the redistribution of burdens in a manner that balances present obligations with future entitlements. It is not merely a financial mechanism, but a societal contract that reflects how a state defines solidarity, responsibility, and long-term stability.

Recent national and parliamentary debates have revealed the complexity of the current landscape. The challenges extend beyond the rising costs of early retirement, the debate over the statutory retirement age, or imbalances in contribution ratios. They encompass broader structural concerns, including gaps in insurance coverage, weak compliance mechanisms, governance issues related to investment management, gender disparities embedded within benefit design, and the structural transformations imposed by the digital economy and non-traditional work patterns.

This paper proceeds from the premise that financial sustainability—while unquestionably essential—remains insufficient unless reinforced by genuine societal legitimacy and participatory legislative processes. A law that affects nearly every household cannot be approached with haste, nor can it be detached from the economic and social realities it is intended to serve.

Accordingly, this paper seeks to unpack the dimensions of the proposed amendments, assess their internal balances, and propose alternative or complementary pathways. It does so through an objective and analytical lens that seeks equilibrium between actuarial rigor and social consideration, between present-day fiscal requirements and the enduring rights of future generations.

Chapter One: Social Security Amendments Between Tests of Financial Sustainability and Shifting Strategic Surroundings

The ongoing debate over amendments to the Social Security Law cannot be approached as a purely procedural legislative matter, nor as a technical response to the outcomes of periodic actuarial reviews. At its core, this file rests upon complex intersections where geopolitical pressures, structural economic imbalances, accelerated demographic transformations, institutional governance challenges, and the management of sovereign assets converge.

A rigorous reading of this reform trajectory must therefore begin with an understanding of the broader pressure environment within which the Jordanian state operates—particularly amid a region being reshaped by protracted conflicts, shifting balances of power, and the erosion of traditional deterrence frameworks.

First: The Overlapping External Pressures and Their Domestic Reverberations

Jordan operates within a highly fluid regional moment marked by the reconfiguration of influence mechanisms, the erosion of strategic certainty, and the rise of hybrid threat patterns—whether in their conventional military form or in their more diffuse manifestations through economic and political pressures.

In such a context, the security environment cannot be separated from the economic one, nor can either be detached from political determinants. These three spheres intersect in ways that render disruption in one domain capable of triggering cascading effects in the others.

Accordingly, the pressures affecting the national economy—ranging from widening poverty and unemployment gaps, to rising public debt, increasing infrastructure costs, and shrinking fiscal space—cannot be divorced from the geopolitical positioning of the state, nor from the costs associated with maintaining internal stability within a volatile regional environment.

Second: Social Security as a Pillar of Supra-Economic Stability

Within this landscape, social security transcends its identity as an insurance institution to become a multi-functional pillar of national stability.

From one perspective, it constitutes the reservoir of retirement savings for Jordanians; from another, it serves as a mechanism for redistributing social risk; and from yet another, it functions as a safeguard against post-employment vulnerability.

For this reason, any alteration to its legislative or financial architecture cannot be read solely through a narrow fiscal lens. Rather, it must be evaluated in terms of its long-term social and political reverberations. This explains the sensitivity of public debate surrounding any proposed amendments: the system is not merely a fund—it is a foundational component of the social contract itself.

Third: Actuarial Drivers and the Limits of Technical Remedies

Actuarial studies have reopened the amendment file through the gateway of financial sustainability, measuring the temporal gap between contribution inflows and future pension liabilities, and identifying what are known as critical equilibrium points.

Yet reducing the challenge to its purely numerical dimension constitutes a limited approach. While actuarial indicators are indispensable, they do not, in isolation, explain systemic imbalances; rather, they reveal their accounting symptoms.

Behind the figures lie deeper structural factors linked to the labor market, insurance compliance levels, investment efficiency, and demographic shifts—all of which extend beyond the scope of partial legislative adjustments.

Fourth: Early Retirement… From Protective Tool to Structural Drain

In its original philosophy, early retirement was conceived as an instrument of fairness for professions characterized by specific health or field-related risks. However, its gradual transformation into a widely utilized option has stripped it of its protective function and repositioned it as a source of structural financial pressure.

Its expansion has generated three interrelated consequences:

1. Premature depletion of insured rights.
2. Inflation of long-term liabilities.
3. The withdrawal of experienced labor from the productive market.

Moreover, certain institutional practices—such as workforce restructuring or collective referrals—have effectively shifted sectoral adjustment costs onto the pension fund, thereby undermining the principle of actuarial fairness.

Accordingly, a growing perspective advocates recalibration rather than abolition—restricting early retirement to hazardous occupations and requiring the entities initiating early exits to bear their associated costs.

Fifth: Demographic Transition and the Pressure of the Time Equation

The steady rise in life expectancy represents one of the most silent yet impactful variables affecting pension systems.

Extended post-retirement lifespans mean—arithmetically—longer payout periods against stable or declining contribution years, thereby disrupting the temporal equilibrium of pension funds.

The implications extend beyond financial considerations to include:

• Redefining the concept of productive age.
• Increasing pressure on the labor market.
• Slowing generational job replacement cycles.

In this light, the gradual increase of the statutory retirement age has been proposed as a demographic adaptation mechanism rather than a purely fiscal measure.

Sixth: The Informal Economy and the Insurance Coverage Gap

The structure of the Jordanian labor market reveals a significant expansion of the informal economy, leaving a substantial segment of the workforce outside the insurance umbrella.

This gap manifests along two parallel tracks:

• Workers inherently engaged in informal activity.
• Workers in the formal sector who remain uninsured.

In both cases, the contribution base erodes, weakening the fund’s capacity to balance future obligations.

Traditional inspection tools appear insufficient to address this phenomenon. This necessitates a transition toward digital compliance mechanisms, institutional data integration, and the development of more effective incentive-and-penalty frameworks.

Seventh: Institutional Governance and Investment Decision Independence

Institutional governance remains a key explanatory factor in the efficiency of managing social security assets.

The stronger the administrative independence, the clearer the accountability mechanisms, and the more defined the separation between oversight and execution, the higher the quality of investment decision-making.

Conversely, role overlap or subjection of decisions to non-economic considerations undermines asset allocation efficiency and erodes public confidence in the institution.

Eighth: Investment Returns Between Relative Improvement and Structural Challenge

Although certain investment indicators have recorded relative improvement in recent periods, performance assessment must be measured against three fundamental criteria:

• The balance between risk and return.
• Portfolio diversification.
• Protection of the real value of assets against inflation and market volatility.

A decline in long-term returns—even when short-term indicators appear reassuring—amplifies pressures on insurance sustainability. Pension systems, by their very nature, are long-horizon institutions; marginal inefficiencies compound over time and translate into structural strain.

In light of the foregoing, social security amendments stand at the intersection of three major pressure circles:

1. The financial sustainability circle linked to actuarial indicators.
2. The demographic and labor market transformation circle.
3. The governance and asset management efficiency circle.

These circles do not operate in isolation; rather, they interact dynamically within a mutually reinforcing framework. Consequently, any partial reform risks reproducing the same crisis in different forms.

Effective reform, therefore, lies not merely in adjusting an age threshold, tightening a benefit path, or increasing contribution rates, but in reengineering the system as a whole—within a vision that balances social justice, financial sustainability, and institutional efficiency.

Chapter Two: The Coverage Gap, Actuarial Imbalance, and the Intergenerational Implicit Debt Dilemma

If the first chapter established the external and structural pressures surrounding the social security file, this chapter shifts to unpacking the internal architecture of imbalance—those areas where real pressure on system sustainability is formed: insurance coverage gaps, evasion, demographic distortions, and the uneven relationship between contributions and benefits.

First: Insurance Evasion as a Dual-Impact Distortion

Insurance evasion constitutes a deeply rooted loophole with dual consequences: weakening the fund’s financing base on the one hand, and eroding the individual’s future pension rights on the other.

This phenomenon manifests in two distinct forms:

1. Non-registration altogether, where the employee operates entirely outside the insurance umbrella.
2. Under-declaration of wages, the more ambiguous practice, whereby workers are registered at minimum wage or below their actual earnings—reducing current contributions while laying the foundation for weak future pensions.

Herein lies the paradox: what may appear as short-term “savings” for the employer—or even for the employee—translates into long-term losses at retirement, creating a widening gap between pre-retirement and post-retirement living standards and weakening the social function of the system.

Accordingly, the solution cannot remain confined to traditional inspections or abstract penalties. It requires rebuilding the compliance architecture through integrated digital linkage among tax databases, labor records, and financial institutions—narrowing the space for informal maneuvering.

Second: The Informal Economy… The Critical Mass Outside the System

Estimates indicating that more than half of the labor force operates within the informal economy reveal a structural gap that exceeds the containment capacity of traditional social security tools.

The informal economy implies:

• Fragile employment relations.
• Absence of formal contracts.
• Weak enforceability of legal provisions.

Integrating this critical mass requires a more flexible insurance model—possibly through simplified contribution schemes, tiered and reduced contribution brackets, tax incentives, or adaptable digital mechanisms tailored to remote workers and digital economy participants.

Insisting on subjecting these categories to the conventional mandatory model may perpetuate exclusion rather than achieve gradual inclusion.

In this context, the challenge is not merely enforcement—it is redesigning access pathways to social protection in a manner aligned with evolving labor realities, while safeguarding actuarial balance and long-term system viability.

Third: Non-Jordanian Labor and the Contribution–Benefit Equation

The presence of a notable proportion of non-Jordanian workers within the contributor base constitutes an important component of the fund’s financing equation. However, the broader picture remains more complex, as a significant segment of migrant labor operates outside the insurance umbrella altogether.

This reality intersects economic, political, and social considerations, requiring a calibrated approach that balances:

• Maintaining labor market competitiveness.
• Protecting workers’ rights.
• Preserving the fund’s financial sustainability.

The inclusion of migrant workers within the system enhances the contribution base in the short to medium term. Yet the broader structural question concerns enforcement, coverage equity, and the long-term implications of contribution patterns relative to benefit eligibility. A fragmented inclusion approach risks distorting actuarial balance while failing to secure meaningful protection.

Fourth: Investment Returns Between Conservative Stability and Limited Growth

Available data indicate that a considerable portion of the fund’s assets is invested in low-risk instruments—such as government bonds—yielding relatively stable returns.

This approach provides short- to medium-term financial stability. However, it raises a strategic question regarding the sufficiency of such returns in the face of long-term liabilities that are steadily expanding.

Sectoral or geographic concentration in investments reduces immediate volatility but may constrain growth potential—particularly in a global economy increasingly driven by high-yield knowledge and technology sectors.

Accordingly, portfolio diversification—both sectorally and geographically—becomes essential. Expanding into high-quality productive investments, without exposing assets to excessive or uncalculated risk, represents a necessary evolution in investment strategy. The objective is not speculative expansion, but balanced growth capable of preserving capital while enhancing long-term return sustainability.

Fifth: Demographic Imbalance and the Reversal of the Financing Equation

Since the establishment of the social security system in the early 1980s, it benefited from a clear demographic advantage: a broad base of contributors relative to a limited number of retirees.

This favorable ratio enabled the accumulation of surpluses over several decades.

However, the gradual transformation of the population pyramid—combined with a faster rise in the number of retirees relative to contributors—signals a potential reversal of the foundational financing equation upon which the system was originally built.

Compounding this challenge, certain pension benefits in specific cases exceed the actual value of cumulative contributions paid, generating what is economically referred to as “intergenerational implicit debt.”

Sixth: Implicit Debt… A Deferred Burden on Future Generations

When a contributor pays into the system for a limited period and subsequently receives pension benefits over a duration that surpasses the cumulative value of contributions, the resulting gap does not disappear—it is deferred to subsequent generations.

This does not necessarily imply moral imbalance; rather, it reflects a historical system design based on different demographic expectations.

However, the continuation of this pattern without gradual adjustment risks the accumulation of future obligations that may place pressure on:

• Contribution rates.
• Benefit levels.
• Investment strategies.

Herein lies the sensitivity of reform. A sharp correction may be perceived as an erosion of acquired rights, while postponement compounds long-term costs.

Thus, the challenge is not whether reform is necessary, but how to calibrate it in a manner that distributes burdens fairly across generations, preserves social legitimacy, and safeguards the structural integrity of the system over time.

Seventh: Pillars of Reform: Gradualism, Alternative Protection, and Automaticity

Three central reform principles have emerged in the national debate:

• Gradualism

Sudden reforms tend to generate social shocks, while phased adjustments allow costs to be distributed over time and provide economic actors with space to adapt. Gradual implementation reduces resistance, enhances predictability, and preserves social legitimacy—particularly in systems that affect broad segments of society.

• Alternative Protection Mechanisms

If raising the retirement age or tightening eligibility conditions delays access to pensions, then expanding unemployment insurance coverage or strengthening transitional protection tools becomes a balancing necessity rather than a secondary option. Reform cannot be conceived solely as a recalibration of entitlements; it must also include cushioning mechanisms that mitigate the social consequences of transition.

• Automatic Adjustment Mechanisms

In the absence of automatic stabilizers, the system remains vulnerable to cyclical political decision-making—whether populist expansions or abrupt austerity measures. Linking certain variables—such as minimum pension thresholds or contribution rates—to objective economic indicators (e.g., average wages, growth rates, or demographic ratios) introduces systemic dynamism and reduces reliance on frequent legislative intervention. Such mechanisms enhance predictability and intergenerational fairness.

Eighth: Reform as Systemic Engineering

Reducing reform to the amendment of a single article or clause strips it of its structural essence. Social security is not an isolated legal instrument; it intersects directly with:

• The Labor Law framework.
• Public and private human resource systems.
• Labor market policies.
• Broader macroeconomic orientations.

Improvements in growth rates, productivity, and formal employment expansion would positively impact the fund to a degree that may exceed the effect of certain partial amendments.

Thus, genuine reform lies in reconstructing the system within an integrated vision—addressing the environment in which social security operates, not merely its textual provisions.

In essence, the issue—if it may be termed a crisis—is less a crisis of the fund itself than a crisis of balances:

1. A balance between contributions and benefits.
2. A balance between present obligations and future rights.
3. A balance between social justice and financial sustainability.

Resolving this dilemma requires a calibrated reform equation—gradual, flexible, equipped with automatic mechanisms, and anchored in a broader economic strategy that revitalizes the contributor base before redistributing burdens across it.

Chapter Three: The Dialectic of Expanding Coverage Versus Reform, and the Balance Between Protection and Sustainability

If the reform debate initially began with diagnosing financial and actuarial imbalances, its later evolution elevated the discussion to a more strategic level. The central question is no longer whether to reform, but rather how to reform, through which instruments, and according to which priorities.

Three core issues have consequently shaped the policy debate: expanding coverage, legislative adjustment mechanisms, and the institutional roles involved in insurance decision-making.

First: Expanding Coverage… Between the Logic of Protection and the Logic of Deferred Cost

Expanding insurance coverage has frequently been presented as the shortest path toward strengthening the fund’s financial solvency, based on a straightforward assumption: the broader the contributor base, the greater the inflow of contributions and the stronger the cash flow position.

Yet this proposition—despite its apparent validity—entails conceptual oversimplification when assessed from a long-term actuarial perspective.

Coverage expansion improves the fund’s position:

• In the short term, by increasing contribution revenues.
• In the medium term, by postponing benefit payouts.

However, it simultaneously generates future pension obligations. What appears as an immediate financial improvement may gradually transform into an additional long-term burden on the system.

Thus, framing coverage expansion as a financial rescue instrument represents a conceptual misalignment. Social security, at its core, is a social protection institution before it is a financing mechanism.

Accordingly, expanding coverage should be approached from the standpoint of:

• The right to social protection.
• Reducing social vulnerability.
• Broadening the national safety net.

Rather than merely enhancing financial indicators.

Second: Selective Coverage… Low-Cost Windows for Expansion

Despite actuarial reservations, certain areas allow for coverage expansion without imposing excessive financial pressure—provided that design mechanisms are carefully structured.

Among the most notable are:

• Migrant Labor
The majority of non-Jordanian workers do not remain in the domestic labor market long enough to qualify for long-term pension benefits. In many cases, their entitlements are limited to lump-sum compensation rather than extended pension payments.

From a financial perspective, their inclusion represents relatively lower long-term cost exposure and may function as a supportive funding stream for the system.

• Domestic Workers
This sizable group has demonstrated—according to field observations—an increasing willingness to integrate into formal protection systems, reflecting growing awareness of social security as a stabilizing mechanism.

• Agricultural Workers
The historical exclusion of this sector was justified by concerns regarding its limited economic capacity. However, continued full exclusion creates a substantial protection gap. A more balanced solution could involve partial government support for contributions instead of total exemption, enabling gradual integration while maintaining equity considerations.

Third: Insurance Evasion… The Net Financial Leakage

When evasion rates approach nearly one quarter of the labor force, the system faces systematic and structured financial leakage.

Importantly, evasion manifests in multiple forms:

• Complete non-registration.
• Nominal or fictitious registration.
• Manipulation of declared wages subject to contribution deductions.

Recovering this segment into the insurance umbrella could generate financial returns equivalent to—or even exceeding—the impact of certain legislative amendments.

In this regard, the following tools emerge as more effective inclusion instruments than traditional inspection mechanisms alone:

• Temporary incentive programs (such as settlement initiatives).
• Amnesty for prior non-compliance periods.
• Digital data integration and cross-institutional linkage.
• Administrative simplification and procedural streamlining.

Traditional inspection remains fundamentally a deterrence mechanism. Sustainable reform, however, requires shifting from deterrence toward integration—transforming compliance into an economically rational and administratively accessible choice.

Ultimately, the debate over expanding coverage versus preserving sustainability cannot be resolved through binary logic. It demands calibrated design—where protection expansion aligns with actuarial prudence, financial leakages are systematically reduced, and reform is embedded within a broader labor market and economic development strategy.

Fourth: The Role of Incentives and Transitional Programs in Expanding the Base

Practical experience—particularly temporary incentive programs implemented during times of crisis—has demonstrated that providing legislative and procedural facilitation can encourage thousands of enterprises to regularize their status and join the system.

However, the effectiveness of such programs remains contingent upon the integration of their instruments. Financial incentives alone are insufficient unless accompanied by:
• Regulatory enforcement.
• Digital oversight.
• Bureaucratic simplification.

In other words, voluntary inclusion requires an intelligent enforcement environment, not merely temporary exemption decisions.

Fifth: Legislative Reform… Between Inflation and Non-Legislative Solutions

Frequent amendments to the Social Security Law within short time intervals raise a legislative concern that extends beyond textual modifications to the broader issue of policy stability.

Legislation, by nature, is a heavy regulatory instrument. Repeated reliance upon it may reflect:
• The absence of effective administrative remedies.
• Weak executive enforcement tools.
• Or deficiencies in supportive public policies.

This has led to proposals advocating the exhaustion of non-legislative solutions before proceeding to amend the law, such as:
• Improving collection efficiency.
• Expanding administrative coverage.
• Increasing investment returns.
• Controlling evasion.

Addressing root causes may eliminate—or at least postpone—the need for further legal amendments.

Sixth: Dialogical Governance and Insurance Decision-Making

One of the most notable positive developments has been the shift of the social security file from a closed bureaucratic sphere to a participatory dialogue space, through economic and social dialogue institutions.

This transition has enhanced:
• Plurality of viewpoints.
• Testing of assumptions.
• Anticipation of potential impacts.

Yet the effectiveness of this process depends on the extent to which dialogue outcomes are reflected in governmental decisions. When executive measures precede the conclusions of public debate, institutional trust erodes, and dialogue risks becoming a procedural formality rather than a genuine participatory pathway.

Seventh: The Political Perception Gap Regarding Future Risks

A non-technical yet highly influential challenge lies in the varying levels of awareness concerning the magnitude of future actuarial risks.

The longer acknowledgment of structural imbalances is delayed, the narrower the margin for gradual reform becomes, and the higher the eventual cost of correction.

Accordingly, early political support for reform is as important as its technical design. Social insurance legislation is inherently long-term in effect and requires a decision-making umbrella capable of absorbing the transitional costs of reform.

Eighth: Investment in Low-Risk Sovereign Projects

Within the investment debate, proposals have emerged advocating for expanding social security funds’ presence in national monopolistic or quasi-monopolistic projects, such as strategic infrastructure.

These projects are typically characterized by:
• Stable demand.
• Predictable returns.
• And, in some cases, government guarantees.

Such characteristics make them suitable investment environments for pension funds seeking a balance between security and return, without exposing assets to high volatility.

The debate surrounding coverage expansion and legislative reform reveals that the core challenge lies in prioritization and calibrating approaches.

Expanding coverage is a protective necessity, but it is not a financial panacea.
Legislation is a reform instrument, but not the only one.
Investment is a supportive lever, yet it remains governed by risk equations.

Amid these parameters, a more balanced reform trajectory emerges—one built upon:
• Smart, non-inflationary coverage.
• Gradual, non-shock reform.
• Participatory, not symbolic governance.
• And prudent, not speculative sovereign investment.

Chapter Four: Non-Legislative Reform Alternatives and a Gender-Responsive Approach within the Social Security System

This chapter broadens the reform trajectory beyond direct legislative interventions, moving instead toward a deeper analytical examination of the structural imbalances shaping the equilibrium of the social security system. These imbalances manifest in insurance coverage gaps, collection inefficiencies, inequities in benefit distribution, and—critically—the gender dimension, which requires renewed conceptual and policy positioning in light of contemporary socio-economic realities.

First: The Mandatory Coverage Gap and Insurance Evasion

Available indicators point to a significant proportion of the workforce that is legally subject to mandatory social security coverage yet remains outside the system—whether through total evasion, partial registration, or manipulation of wages subject to contribution deductions.

The gravity of this gap lies in its layered impact. Its consequences extend beyond immediate revenue losses to produce:
• Distortions in insurance equity between compliant and non-compliant entities.
• Future pressure on unfunded social protection networks.
• Reduced accuracy in long-term actuarial projections.

This issue also intersects with the accumulation of outstanding debts owed by both public and private enterprises. These arrears represent dormant financial blocks that could otherwise enhance the funding capacity of insurance funds.

Accordingly, improving arrears collection, restructuring debts, and strengthening compliance enforcement constitute reform avenues that may be socially less costly than direct benefit reductions or raising the retirement age.

Second: Reframing the Old-Age Retirement Age

Proposals to raise the old-age retirement age generate interconnected consequences that extend beyond purely financial calculations, affecting labor market dynamics and intergenerational balance.

Prolonging workers’ tenure in employment may slow the flow of job opportunities for younger cohorts, potentially exacerbating unemployment rates—particularly in economies with limited job creation capacity.

Within this context, more flexible alternatives have been proposed, including:

1. Voluntary Extension Beyond Retirement Age
   Allowing workers to continue employment voluntarily after reaching retirement age—subject to health and professional capacity—without imposing universal legislative compulsion.
2. Partial Re-Inclusion of Retirees Who Return to Work
   Subjecting returning retirees to selected insurance branches—such as work injury insurance—rather than fully excluding them from the system, thereby preserving rights while generating additional revenue streams.

 

Third: Early Retirement as a Structural Financial Pressure Point

Early retirement remains one of the most significant sources of actuarial pressure, particularly when used as an administrative instrument for restructuring the public sector or reducing operational expenditures.

Mass early retirements generate long-term pension liabilities without corresponding growth in contribution inflows, creating a structural gap between:
• The growth rate of retirees.
• The growth rate of active contributors.

Thus, reforming early retirement should not be limited to tightening eligibility criteria. It must also address the administrative and human resource systems that incentivize its overuse in the first place.

Fourth: Automation as a Compliance and Regulatory Structuring Tool

Given the limited effectiveness of traditional field inspection—especially amid the expansion of the informal economy—automation emerges as a sophisticated regulatory lever.

Its applications include:
• Electronic interconnection among governmental institutions.
• Smart inspection systems.
• Big data analytics to detect patterns of evasion.

Through such mechanisms, compliance shifts from a reactive enforcement process to a proactive system based on early-warning signals and predictive oversight.

In this framework, non-legislative reform pathways—grounded in administrative modernization, digital transformation, and structural recalibration—may offer sustainable improvements that complement, rather than replace, statutory amendments.

Fifth: A Gender-Responsive Approach and the Redesign of the Insurance Pathway

A gender-based analysis reveals structural gaps in the design of the social security system. Historically, the system has been built upon the assumption of a linear and uninterrupted career trajectory—an employment model that more closely reflects traditional male work patterns than the lived professional realities of many women.

Women’s employment paths are often characterized by interruptions related to:
• Pregnancy and childbirth.
• Childcare responsibilities.
• Elder care.
• Unpaid care work burdens.

These discontinuities expose structural mismatches within the insurance design framework.

Key Derived Imbalances

1. Lump-Sum Withdrawal Linked to Marital Status
   Conditioning eligibility for lump-sum withdrawals on marriage, divorce, or widowhood may inadvertently incentivize women to exit the labor market rather than remain economically active.
2. Dependency Allowance
   Women frequently encounter more complex verification procedures to access dependency benefits compared to men, despite the growing prevalence of female-headed households.
3. The Gender Wage Gap
   Wage disparities translate directly into lower contribution levels and, consequently, reduced pension benefits. The retirement outcome thus reproduces labor market inequality over the long term.
4. Spousal Inheritance Provisions
   This remains a debated issue where actuarial logic intersects with cultural and social norms, requiring a balanced approach that safeguards both equity and financial sustainability.
5. Early Retirement Reduction Rates
   Although early retirement rates are relatively comparable between men and women, the financial penalty rates applied to women can, in some cases, result in proportionally higher long-term impact due to lower cumulative contributions.

Sixth: Maternity Insurance and Alternative Protection Mechanisms

While maternity insurance exists within the system, the reform discourse has introduced broader instruments aimed at addressing structural gender gaps, including:

• Extended caregiving allowances beyond maternity leave.
• Care credit systems (Care Credits) that recognize unpaid care periods as contributory time.
• Gradual reintegration mechanisms facilitating return to the labor market.

In parallel, debate has emerged regarding domestic care support programs. These may function as indirect economic empowerment tools if properly regulated; however, absent legislative safeguards, they risk reinforcing informal and unregulated labor patterns.

In essence, a gender-responsive reform framework requires moving beyond formal equality toward substantive equity—recognizing differentiated life-cycle patterns and redesigning insurance pathways to accommodate them without undermining actuarial balance.

Top of Form

Seventh: Expanding Coverage to Targeted Categories

Proposals under discussion include:
• Extending coverage to children of Jordanian women.
• Incorporating maternity insurance within the voluntary subscription scheme.
• Expanding protection umbrellas for women working in the informal economy.

Taken together, these proposals suggest that effective reform requires a multi-layered approach built upon:
• Maximizing compliance rather than reducing benefits.
• Incentivizing continued labor force participation instead of merely extending mandatory retirement age.
• Gender-responsive re-engineering of insurance pathways.
• Activating digital tools in oversight and collection mechanisms.

Through such an approach, social security evolves from a system focused on deferred benefit disbursement into a dynamic protection architecture—one capable of responding to labor market transformations while redistributing social risks equitably and sustainably.

Chapter Five: Legislative Interdependence and Sustainability Options Between Parliament and Government

In this chapter, the reform debate assumes an explicitly institutional and legislative dimension. The discussion shifts from technical and sectoral remedies to the sphere of decision-making, where the executive and legislative branches intersect in reshaping the legal framework governing the social security system.

Within this context, the anticipated amendments to the Social Security Law represent a pivotal juncture—not only in terms of their substance, but also regarding their timing, drafting mechanisms, and consistency with the outcomes of national dialogue and specialized sectoral consultations.

First: The Dilemma of Legislative Urgency and the Limits of Participation

Institutional concerns intensify when legal amendments are fast-tracked without exhausting consultation pathways. Legislative urgency—if substantiated—may be perceived as undermining the consensual legitimacy of reform.

National dialogues, including sectoral, union-based, and actuarial consultations, derive their value not from their formal convening but from the degree to which their outputs are genuinely reflected in legal texts.

Circumventing or compressing this process may result in:
• Erosion of institutional trust.
• Weakening of societal ownership of reform.
• Legal texts disconnected from the realities of the labor market.

Second: The Interdependence Between the Social Security Law and the Labor Law

A central premise emerging from parliamentary debate is that amendments to the Social Security Law will remain limited in impact unless accompanied by parallel revisions to the Labor Law and related employment regulations.

This interdependence stems from the functional linkage between the two legal frameworks. Variables such as:
• Termination of employment.
• Contractual arrangements.
• Job stability.

Directly influence the continuity of insurance contributions.

Key provisions in this regard include:

• Open-Ended Employment Contracts
Certain current formulations permit termination of long-serving employees without sufficient safeguards, resulting in involuntary interruption of their contribution record.

• Termination for Organizational or Administrative Reasons
These practices are sometimes used as indirect pathways toward early retirement, generating long-term pension liabilities.

• Human Resource Regulations in the Public Sector
Particularly provisions granting broad discretionary authority for termination of service, which carry financial implications for social security funds.

In the absence of legislative harmonization, reform efforts risk remaining fragmented—or even undermining their own actuarial objectives.

Third: Inclusion of New Categories within the Digital Economy

The contemporary labor market has expanded to include non-traditional forms of employment, most notably platform-based work facilitated through smart applications. Tens of thousands of drivers and service providers currently operate outside traditional insurance frameworks.

The exclusion of these categories represents a dual gap:
• A social protection gap affecting the workers themselves.
• A revenue gap affecting insurance funds.

Given the rapid expansion of licensed digital platforms, integrating these workers into the social security umbrella is no longer a marginal improvement but a proactive necessity to regulate structural transformations in the labor market.

Fourth: The Investment Fund Between Short-Term Needs and Long-Term Strategy

A central debate emerges between two investment pathways:

1. Long-Term Investments
   Such as large-scale real estate or developmental projects with deferred returns.
2. Medium- and Short-Term Investments
   Capable of providing periodic liquidity that supports near-term financial balance.

The dilemma arises when investment portfolios become overly concentrated in long-horizon assets, while insurance funds simultaneously require stronger immediate cash flows to maintain operational equilibrium.

Fifth: Institutional Governance and Investment Decision Independence

Proposals for governance reform have moved to the forefront of debate, particularly regarding the separation of oversight and executive functions and the enhancement of investment decision independence.

This approach rests on the premise that:
• Functional role overlap may constrain decision-making efficiency.
• Institutional independence enhances transparency and accountability.
• Governance models comparable to central banking structures offer advanced institutional reference frameworks.

Accordingly, restructuring should not be viewed merely as an administrative measure, but as a long-term sustainability instrument.

Sixth: The Societal Debate over the Retirement Age

Adjusting the old-age retirement threshold remains among the most sensitive reform components due to its wide-ranging societal impact.

Positions are generally divided between:
• A supportive current driven by actuarial considerations.
• An opposing current motivated by livelihood and employment concerns.

Objections are particularly fueled by:
• Elevated unemployment rates.
• Limited job creation capacity.
• Intensifying competition for employment opportunities.

Fundamental questions arise regarding the economy’s ability to absorb prolonged employment tenure without crowding out younger generations.

Seventh: Early Retirement Between Regulation and Elimination

While early retirement is widely acknowledged as a source of financial strain, prevailing proposals do not advocate its complete abolition. Instead, they call for:
• Recalibrating eligibility conditions.
• Linking provisions to updated actuarial studies.
• Restricting its use as an administrative instrument.

This is especially pertinent given the large number of institutional early retirement decisions that have compounded cumulative fiscal pressure.

Eighth: Actuarial Indicators and the Break-Even Point

Reform warnings are grounded in indicators measuring the gap between:
• Inflows (contributions and investment returns).
• Outflows (pension disbursements).

Within this framework:
• Any improvement in investment performance delays the break-even threshold.
• Increased participation rates or enhanced returns recalibrate the sustainability timeline.

Ninth: The Cross-Generational National Dimension

The debate transcends immediate financial considerations and is increasingly framed as a sovereign social issue affecting:
• Present generations.
• Future generations.
• Even those not yet born.

At its core, social security represents a long-term savings-based social contract, intersecting the rights of contributors with the state’s social obligations.

This chapter concludes that effective legislative reform cannot be constructed upon isolated or expedited amendments. Rather, it requires:
• Legislative interdependence between labor and social security laws.
• Deepened engagement with national dialogue outcomes.
• Expanded inclusion of emerging workforce categories.
• Restructured investment governance.
• Balanced consideration of actuarial requirements and economic realities.

In this manner, legislation evolves from a narrow financial control instrument into a comprehensive framework for social sustainability—one that restores trust between citizens and social protection institutions.

Conclusion

The overall analysis demonstrates that reforming the social security system represents a pivotal moment in redefining the state’s social responsibility and the nature of the relationship between contributors and the institution, as well as between successive generations that share both the burden of financing and the right to benefits.

Sustainability cannot be achieved merely by raising the retirement age, tightening early retirement conditions, or recalculating contribution rates. Rather, it is built through an integrated system founded on:

• Expanding coverage to include informal workers and the digital economy.
• Strengthening compliance and collection mechanisms instead of reducing benefits.
• Rebuilding investment governance to enhance independence and transparency.
• Harmonizing the Social Security Law with the Labor Law and related employment regulations.
• Institutionalizing social dialogue as an integral part of the legislative process, not an afterthought.

The greatest risk facing any reform is for it to be perceived as an imposed burden rather than a shared national choice. When transparent explanation is absent and the debate is reduced to abstract figures, trust erodes and public discourse shifts toward polarization.

Conversely, when reform is presented as an investment in the future of generations—grounded in clear data, genuine participation, and balanced distributive justice—it regains its meaning as an expression of long-term national solidarity.

In this context, the real challenge lies not merely in amending legal provisions, but in building national consensus around the philosophy underpinning the reform. Financial sustainability loses its value if it undermines the system’s social legitimacy, just as popular legitimacy is meaningless if actuarial realities are ignored.

Between these two poles lies the equation of sound reform: financial sustainability grounded in social legitimacy, and balanced legislation that looks to the future without neglecting present realities.

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