The International Monetary Fund (IMF) said that pension payments by the Social Security Corporation are “likely to exceed” contribution revenues starting in the 2030s if the government does not implement substantial pension reforms. It warned that continuing along this path could require financing from the state budget beginning in the 2050s to cover revenue shortfalls, thereby increasing overall financing needs and raising public debt levels.
اضافة اعلان
In its Fourth Review under the Extended Fund Facility and the First Review under the Resilience and Sustainability Facility arrangements with Jordan—obtained by Al Mamlaka—the IMF praised the government’s plans to proceed with implementing the necessary reforms in 2026 to ensure the long-term financial sustainability of the Social Security Corporation. The report referenced the findings of the 11th actuarial study, which emphasized the urgent need for reforms to support the sustainability of the pension system while maintaining the Corporation’s role as a major investor in the local economy.
The actuarial study conducted by the Social Security Corporation showed that the first breakeven point is expected in 2030, when direct insurance revenues from contributions will equal insurance expenditures. It noted that pushing this first breakeven point further into the future is considered a positive indicator of stronger financial stability and sustainability.
The study added that the second breakeven point is expected in 2038, at which time insurance revenues and annual investment returns would no longer be sufficient to cover required insurance expenditures if investment returns do not improve.
The Corporation stressed that the current study’s results highlight the need for legislative amendments to the Social Security Law to ensure that all breakeven points are deferred to later dates, strengthen the sustainability of the insurance system, and protect the rights of future generations. It explained that discussions on amendments and reforms to the Social Security Law will take place through a series of national dialogues with relevant stakeholders and experts under the umbrella of the Economic and Social Council.
The IMF noted that, based on the results of the 11th actuarial review, the government—working with technical support from the International Labour Organization, the IMF, and the World Bank—is evaluating a set of preliminary proposals. These include reforming the early retirement system, extending the retirement age, and considering a fair actuarial accrual rate, among other options, to be incorporated into a draft of amendments to the Social Security Law.
According to the report, the draft amendments also propose replacing the current unemployment insurance program, which is based on individual accounts, with a genuine insurance program based on risk pooling. A pension reform concept note will be prepared and adopted, outlining comprehensive parametric reforms to ensure the long-term financial sustainability of the Social Security Corporation. Based on this, the draft amendments to the Social Security Law are expected to be submitted to the House of Representatives by September 2026.
Regarding pensions, the IMF report stated that the assets of the Social Security Investment Fund reached JOD 17.9 billion (about 40% of GDP) in September 2025. While the Corporation “continues to record financial surpluses,” its underlying financial position is “gradually deteriorating.”
The IMF projected that the Corporation would achieve a consolidated surplus (excluding interest income from its holdings of government debt) equivalent to 1.7% of GDP in 2025—around 1 percentage point of GDP lower than previously estimated at the time of the third review.
It is estimated that contributions, net of pension payments, declined to 0.8% of GDP in 2025, compared with an average of 1.8% of GDP during 2015–2019. This reflects the emergence of demographic pressures, as well as—importantly—the ease and incentives associated with early retirement practices.
The report noted that early retirees accounted for about 60% of new retirees in 2023 and 2024, and around 50% of the total number of retirees covered by the Social Security Corporation as of early 2024. Corporation data further show that early retirement currently represents 64% of all retirees.
The report also referenced a recent government decision abolishing the requirement for mandatory retirement after completing 30 years of service in the public sector, effective January 2026.
Finally, the IMF stressed the need to enhance labor market flexibility and increase women’s participation in the workforce, by submitting amendments to the Labor Law to the House of Representatives aimed at improving labor market flexibility, boosting female labor force participation, and strengthening childcare provisions.
