A new law that will raise the age of retirement and cut pensions in Tunisia has been met with resistance by civil servants, trade unions and local policy analysts. The law will affect nearly 700,000 retired civil servants and thousands more private sector pensioners. According to the Ministry of Social Affairs, the pensions of 47 percent of  private sector workers average TND 150-348 (US$ 67-156).

A new law that will raise the age of retirement and cut pensions in Tunisia has been met with resistance by civil servants, trade unions and local policy analysts. The law will affect nearly 700,000 retired civil servants and thousands more private sector pensioners. According to the Ministry of Social Affairs, the pensions of 47 percent of  private sector workers average TND 150-348 (US$ 67-156).

“I am concerned because the government is about to pass a bill that reduces pensions while prices are soaring,” says Lilia Wertani, a math teacher who recently retired after a 35-year career in education. Wertani says teachers already earn low wages and face a cycle of “constat indebtedness.”

Pension fund deficit

The bill is an effort by Habib Essid’s government to tackle an increasing budget deficit, although the country’s largest labour union – the Tunisian General Labour Union (UGTT), believes the deficit should be addressed differently. The government argues that increasing the retirement age to 65 will strengthen productivity and reduce the cost of pensions. The UGTT believes the amendment will only deteriorate the lives of pensioners, who are already confronted with poor health care and a growing wave of psychological alienation.

Last year, the deficit of the National Pension and Social Protection Fund for civil servants amounted to around TND 426 million (US$ 191 million). The deficit of the National Social Security Fund – for private sector employees, artisans and traders – was approximately TND 310 million (US$ 140 million).

Elites still have privileges

Pensioners like Wertani maintain that the best option to reduce the deficit is to remove the privileges enjoyed by senior government officials, such as free cars, free gas and high travel allowances, as well to fight tax evasion. “Raising the retirement age will deprive thousands of young people of their right to work in a country where young people have revolted to demand their right to dignity and work,” she says.

Local economic analysts say the new law will merely buy the government time. Dr. Bader Smawi says budgets of social funds have been imbalanced for years, which seriously threatens their obligations towards their stakeholders. “The government’s solutions will not find a way out because they merely postpone the problem, “ Smawi told Correspondents. Smawi argues that only an overhaul of the system can fix the books: “It is necessary to comprehensively review the social security system, rationalize its expenditure and diverse its funding sources,” he says.