The old-age retirement age is one of the most sensitive and influential variables in ensuring the sustainability of social insurance systems, as it directly affects the balance between contribution periods and benefit periods, as well as the long-term relationship between insurance revenues and pension expenditures.
اضافة اعلان
The lower the retirement age relative to life expectancy, the wider the actuarial gap and the greater the pressure on pension funds, especially considering the rapid demographic transformations experienced by most countries around the world.
Any adjustment to the retirement age should be linked to broader reform of the social security system, which constitutes the backbone of Jordan’s social protection framework, and should align with the updated National Social Protection Strategy. The objective of reform must be to strengthen social protection and enhance the system’s overall capacity to perform its preventive and protective role, as this is one of the fundamental responsibilities of governments and public policy.
In Jordan, the statutory old-age retirement age remains set at 60 for men and 55 for women, an arrangement that is no longer consistent with current demographic and health realities, nor with global trends in pension systems. Life expectancy has improved significantly over past decades. According to data from the Department of Statistics, it now stands at approximately 77 years for women and 74 years for men. This means that the post-retirement period has expanded relative to actual contribution years, thereby increasing the cumulative cost of pensions.
Reports by the International Labour Organization (ILO) indicate that one of the main global challenges facing pension systems is rising life expectancy combined with either fixed or slowly adjusted retirement ages. This dynamic increases pension expenditure as a share of GDP and undermines the sustainability of pension funds unless addressed through structural reforms, chief among them the gradual increase of the retirement age.
Data from the Organisation for Economic Co-operation and Development (OECD) show that the average statutory retirement age among member countries is approximately 64 for men and 63 for women. A growing number of countries are moving toward raising it to 66 or 67 and linking it automatically to life expectancy. Many are also narrowing or eliminating the gender gap in retirement age, as maintaining such disparities is no longer economically or socially justified given improvements in women’s health and labor market participation.
In this context, maintaining a relatively low retirement age in Jordan places additional pressure on the social security system. The impact is not limited to actuarial considerations; it also extends to the macroeconomy and labor market. Large-scale early exits from the labor force reduce the size of the active workforce, weaken productivity, and increase reliance on pension transfers during life stages in which individuals may still be capable of work and economic contribution.
Accordingly, there is an urgent need to reconsider the current retirement age. Retirement at 60 for men and 55 for women is no longer appropriate considering current demographic realities. A gradual increase, reaching 65 for men and 60 for women, beginning with new contributors, could represent a policy option aligned with international trends. Such a reform would generate clear benefits, including longer contribution periods, delayed pension disbursement, improved financial sustainability indicators, and a stronger, more cohesive social protection system.
However, the success of this approach requires a comprehensive reform package that considers the nature of occupations, particularly those internationally classified as arduous or hazardous, which may warrant special arrangements. It also necessitates reviewing wage policies to increase and restructure wages in ways that make continued employment economically attractive, alongside improving working conditions.
In conclusion, international experience and best practices demonstrate that gradually raising the retirement age is among the most effective and least socially costly reform tools, provided it is implemented within a clear timeline and accompanied by supportive labor market policies aligned with broader social protection strategies.
