JMA fund faces JD500,000 monthly deficit, bankruptcy

(File photo: Jordan News)
AMMAN — Head of the Jordan Medical Association (JMA) media committee Hazim Qarala said that the association’s retirement fund faces a huge financial deficit due to the decline in its monthly income, according to Saraya News.اضافة اعلان

He said that the pension fund’s monthly deficit ranges from JD500,000 to JD550,000, and pointed out that its debt amounts to some JD26 million, while its assets are estimated at JD53 million.

Qarala said that the association used to pay pensions to certain groups, such as non-practicing retirees and heirs, and this also contributed to the fund deficit, adding that the policy was changed so that only half of the pension would be paid to all retirees.

He added that the number of retired doctors and their beneficiaries stands at 4,800, and the monthly pensions due to them amount to about JD900,000, while the monthly income of the fund from subscriptions ranges between JD340,000 and JD350,000.

According to Qarala, another reason for the deficit is the wrong financial calculations on which the fund was built, indicating that the monthly deductions from salaries are completely disproportionate.

“The Social Security Corporation deducts 21.5 percent from the basic salary, while in the association deducts approximately 7.8 percent from the basic salary,” he said.

Another factor that contributed to the deficit is weak investment, as the association’s general assembly had limited investments to purchasing land only, he said, adding that if the association continues on the current path, the fund will face bankruptcy.

He said that pensions for the current month were paid as usual, at half, but preparations are under way to conduct a new actuarial study to radically resolve the fund’s problem.

He said that one solution that was suggested by a growing number of doctors is to make the subscription by new doctors to the fund optional, especially in light of the Social Security Law, in order to reduce the number of retirees and reduce the burden on the fund in the future.

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