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Protecting the Old

Mona El-Nahhas- Al Aharam 

October 22, 2008 



A group of activists, the majority with leftist backgrounds, announced last week that they would establish a union aimed at defending the rights of Egypt's eight million pensioners. 

The idea of the union was unveiled during a conference at the headquarters of the leftist Tagammu Party.

Tagammu Chairman Rifaat El-Said stressed that the union, which anticipates around 250,000 members, will pursue a social rather than overtly political agenda. "It must remain an independent body with purely social targets," he told conference attendees. 

Former MP El-Badri Farghali was elected as union head by the conference. He worked for Port Said Containers Company for more than 30 years and reached retirement age last year. 

Farghali has already called for a peaceful demonstration to press for pensioners' rights.

He accuses the Ministry of Finance of mismanaging pension funds. "Everything was alright," he told Al-Ahram Weekly, "until the previously independent National Authority for Insurances and Pensions was turned into an affiliate to the Ministry of Finance. Since that time pension funds have been at risk. The Ministry of Finance has used pension funds to speculate on the stock market and fund infrastructure projects, returns from which tend to end up in the hands of the business community rather than pensioners." 

Since public sector pension funds, which are estimated to be worth LE340 billion, began to be administered by the Ministry of Finance there has been a shortfall in payments of pensions, claim union members. Their position appears to be supported by the Supreme Constitutional Court which in two recent rulings ordered that pensions paid to state employees who took early retirement be adjusted upwards and that pensioners are entitled to the same bonus increments as state employees. 

Last July state employees received a bonus of 30 per cent of basic pay while pensioners saw only a 20 per cent increase. 

"The government amended last month's pensions but has done nothing else," says Farghali. 

Mohamed Ma'it, the finance minister's advisor for pensions and insurance affairs, told the Weekly that the ruling of the Supreme Constitutional Court had been referred to the State Council for clarification. 

"The ruling of the Constitutional Court does not need any interpretation. How can they refer the ruling of the highest judiciary body in the land to a lower court to give its opinion?" asks Farghali. "Why don't they make it clear and announce that pension funds do not have the necessary amounts to meet their commitments to pensioners?" 

As worries about savings increase, some pensioners have demanded that their national insurance payments be returned so that they can decide how to invest the money themselves. Ahmed Hassan El-Borie, professor of social legislation at Cairo University, argues that pensioners have every right to make such a request. "Insurance payments are not considered public funds under the constitution," he says. 

State employees pay compulsory insurance while working to finance retirement pensions. 

"There is no legal confusion," insists Ma'it. "The National Authority for Insurances and Pensions is the only body entitled to supervise pension funds. If every pensioner came and asked to invest savings his- or her-self the situation will be one of chaos."

"To accuse the ministry of seizing pensions is a fabrication. We do not have any problem in paying pensions." 

All pension funds, Ma'it continued, are deposited at the National Investment Bank and at the general treasury in governmental bonds. 

The union's other demands include ending any financial discrimination between pensioners and state employees, an annual bonus for pensioners and upgrading social and healthcare provisions. 

So is the union likely to receive official recognition? 

Union members, says Farghali, are in the process of preparing a draft law legitimising the organisation which will then be presented to the People's Assembly. "Of course, we don't expect it to be easy but we are ready to struggle."

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