Despite the wide controversy and objections that accompanied the government’s amendments to Social Insurance and Pensions Law No. 148 of 2019, the House of Representatives gave final approval to the draft law without the government submitting the actuarial study demanded in the report of the joint committee formed from the Energy, Environment and Manpower Committee and the office of the Social Solidarity and Human Rights Committee in the Senate. The amendments focused primarily on redrafting certain provisions regulating the obligations of the public treasury toward the National Social Insurance Authority.
Under the new amendments, the annual installment paid by the public treasury to the Authority rises to approximately 238.55 billion Egyptian pounds ($4.587 billion) during the fiscal year 2025/2026, compared to approximately 227.08 billion Egyptian pounds ($4.367 billion), an increase of approximately 11 billion Egyptian pounds ($211.5 million). The mechanism for the annual increase in the installment will also be reorganized, beginning with a compound rate of 6.4% starting July 2026, then rising gradually at a rate of 0.2% annually until reaching 7% by July 2029, alongside the addition of a fixed sum of 1 billion Egyptian pounds ($19.23 million) annually for five consecutive years.
The amendments also included an expansion of the financial obligations falling on the public treasury, through the addition of items targeting the settlement of financial entanglements between the state and insurance funds, and ensuring the stability of the cash flows necessary to meet future insurance and pension obligations, according to the explanatory memorandum.
The Egyptian Senate had approved the law’s amendments last April, based on the report of the joint committee from the Energy, Environment and Manpower Committee and the office of the Social Solidarity and Human Rights Committee, limiting the amendments to Article (111) only, after the deletion of Articles (22/second paragraph) and (156) contained in the government’s draft.
The joint committee explained that the deletion of the two articles was based on the premise that the rules for settling wages and pensions cannot be treated piecemeal but must be discussed within a comprehensive framework linked to the financing system and financial balance of the insurance system, particularly given the substantive amendments encompassed in Article (111).
The committee also affirmed that any amendment related to settlement mechanisms or pension calculation requires a comprehensive actuarial study ensuring a balance between contributions and insurance benefits, and preserving the stability and financial sustainability of the system, noting that there is consensus with the government on revisiting these files later within a broader vision for addressing the state of insurance and pensions.
In contrast, opponents of the amendments among MPs held that the core of the crisis remains unresolved, arguing that the focus was confined to rearranging the financial and accounting aspects without genuinely addressing the low value of pensions and their erosion against inflation and rising living costs. They stressed that any financial increases will remain limited in impact unless pensions are fairly linked to the minimum wage and inflation rates, guaranteeing the protection of the purchasing power of millions of retirees.
This was compounded by the absence of a comprehensive actuarial study to clarify the long-term impact of the new amendments, with warnings that calculating the difference between the obligations in the old law and the current amendments over approximately 50 years may reveal a deficit approaching 30 trillion Egyptian pounds ($576.9 billion), which they described as a “catastrophic” figure threatening the sustainability of the pension system in the future.
The number of pension holders in Egypt stands at approximately 11.5 million citizens, who receive monthly entitlements within the framework of Social Insurance and Pensions Law No. 148 of 2019. The minimum pension had been 1,495 Egyptian pounds ($28.75) while the maximum reached 11,600 Egyptian pounds ($223.08) in recent years, before the National Social Insurance Authority announced in November 2025 a rise effective January 2026, taking it to 1,755 Egyptian pounds ($33.75), while the maximum rose to 13,360 Egyptian pounds ($256.92). The minimum insurance subscription wage also rose from 2,300 Egyptian pounds ($44.23) to 2,700 Egyptian pounds ($51.92), while the maximum rose to 16,700 Egyptian pounds ($321.15).
The term “pension holders” refers to every person whose employment service in the government, public, or private sector has ended and who has become entitled to receive a monthly income from the Social Insurance Authority, whether due to reaching retirement age (60 years), with pensions paid to heirs in cases of death. The pension is considered, within the philosophy of the social insurance system, a substitute for the income the citizen was earning during their working years, within the framework of social protection that the state is obligated to provide for insured persons and those entitled on their behalf.
The insurance system covers multiple categories including salaried workers, employers, freelance professionals, craftsmen, and other categories defined by law, provided they are subject to insurance contributions.
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Amendments That Reproduce the Imbalances
The General Federation of Pension Unions held that the latest amendments to the Social Insurance and Pensions Law do not address the core of the crisis facing pension holders, but rather reproduce the same imbalances related to the low value of pensions and the erosion of insurance equity, despite the amendments’ official talk of enhancing financial sustainability and social protection.
In a lengthy memo sent to parliament in both its Senate and House chambers, the Federation held that the draft law conflicts with the constitutional philosophy enshrined in Articles (17 and 27) of the Egyptian Constitution, which obligate the state to guarantee a pension that ensures a “dignified life” and the reduction of income disparities, in addition to a commitment to a minimum wage and pension that achieves social justice.
The Federation’s objections center primarily around the mechanism for calculating the minimum pension, arguing that the National Social Insurance Authority bases its determination on the minimum insurance subscription wage for irregular labor, which reached 2,700 Egyptian pounds ($51.92), rather than linking it to the actual minimum wage for regular state employees, which rose to 8,000 Egyptian pounds ($153.85) effective July 2026.
According to the memo, this linkage has resulted in fixing the minimum pension at only approximately 1,755 Egyptian pounds ($33.75), a figure it considered disproportionate to current living costs or the successive increases in the minimum wage, creating, according to the memo, a widening gap between the incomes of workers and pension holders, and stripping pensions of their ability to provide the minimum standard of dignified living.
The Federation also explained that the crisis relates not only to the value of pensions but also to what it describes as a “structural flaw” in the philosophy of insurance management, built on formal equality between different legal systems. The Constitution distinguishes between social insurance systems for regular workers, social security systems for the uninsured, and protection systems directed at farmers and irregular labor, while the Authority, according to the memo, merges these tracks when calculating the minimum pension, which the Federation considers a direct constitutional violation.
Regarding the amendment to Article 111 on the settlement of the public treasury’s debt to the Insurance Fund, the Federation held that the proposed amendment “threatens the financial sustainability of the Fund,” because it is based on repaying the debt over long time periods and at low yields compared to actual market interest rates, particularly treasury bill yields.
Kamal Abbas, Executive Director of the Labor and Union Services House, explains that the amendments approved by parliament to the Insurance and Pensions Law were limited to the financial aspects related to the public treasury’s debt to the National Social Insurance Authority, while clearly ignoring the fundamental crisis relating to the low value of pensions and the declining living capacity of their holders.
He notes in his conversation with Zawia3 that the amendment to Article (111) focused on restructuring the public treasury’s obligation to repay the debt owed to the Authority, by raising the annual installment value and gradually increasing its rate, “but without any genuine treatment of the situation of more than 11 million pension holders facing worsening living pressures.”
He adds that parliamentary discussions witnessed objections from some MPs regarding the absence of a clear feasibility study for the amendments, in addition to the neglect of reforming pension calculation rules and linking them to inflation levels and rising living costs, but the amendments “passed in a rushed manner due to their connection to the new general budget.”
Abbas affirms that social insurance funds “are not government money but private funds owned by contributors and pension holders,” noting that the Constitution guarantees their protection and obliges the state to ensure them, which necessitates more transparent management and genuine participation by pension holders in decisions relating to their funds. He warns against the continuation of “financial entanglements” between the public treasury and insurance funds, arguing that loading additional burdens on the funds without comprehensive structural reform raises concerns about the sustainability of the insurance system and its capacity to fulfill its obligations in the future.
The Executive Director of the Labor Services House calls for “democratic management” of the National Social Insurance Authority to ensure genuine representation of pension holders and contributors in managing insurance funds, demanding the opening of a comprehensive public dialogue on the law’s amendments with the participation of trade unions, pension holders, and economic and social experts.
The General Federation of Pension Unions’ memo, in its objection to the amendments to Social Insurance and Pensions Law No. 148 of 2019, drew on the constitutional articles regulating the right to social security and social justice, foremost among them Articles (17), (27), and (138), which obligate the state to guarantee a pension ensuring a dignified life, protect insurance and pension funds, achieve social balance, and ensure transparency in managing and disbursing insurance and retirement rights.
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A Pension That Doesn’t Cover the Bare Minimum
MP Irene Saad, chair of the parliamentary bloc of the Reform and Development Party, holds that the amendments do not rise to the level of expectations, particularly given the current economic conditions, explaining to Zawia3 that the draft did not include sufficient tools to strengthen social protection, questioning the absence of actuarial studies justifying the proposed increase rates and whether they are actually capable of meeting the rise in living costs, stressing the need to revisit the amendments to ensure a balance between financial sustainability and social justice.
In a related context, Huwayda al-Sayed, head of the Pensions Union of the Egyptian Telecommunications Company, says that her personal experience with pensions clearly reveals the scale of the flaw in the system, despite a professional career spanning approximately 37 years in which she held the position of Human Resources Director and had been paying insurance contributions at the maximum rate.
She explains in her conversation with Zawia3 that she was surprised upon retirement when her first pension did not exceed 3,000 Egyptian pounds ($57.69), despite her previous professional position, arguing that this amount does not reflect the scale of what was contributed throughout the working years. She notes that the actual minimum pension, even after its amendment to reach 1,755 Egyptian pounds ($33.75), is insufficient to cover the most basic living needs.
Huwayda notes that insurance funds “are owned by pension holders,” but are managed at low yields, and considers attempts to schedule these funds over long periods as reducing their real value over time. She describes the situation of pension holders as “harsh,” given some of their inability to afford treatment costs or surgical operations, placing them before difficult choices that directly affect their lives.
She also points to social transformations such as the delayed age of marriage, leading many employees to retire while their children are still in school, which compounds the financial burdens at a time when income is declining.
For her part, economic and social affairs researcher and chair of the board of trustees of the Noon Family Foundation, Mona Ezzat, holds that linking pensions to the minimum wage represents a necessary step toward achieving a measure of social justice.
Mona explains to Zawia3 that the pension system reflects clear disparities between different sectors: employees in the government sector enjoy a higher level of stability due to the commitment to applying the minimum wage and the availability of additional benefits, while the private sector comes second, subject to the regularity of contribution payments. The informal sector, by contrast, remains the most fragile, due to the historically absent insurance protection and weak rates of enrollment in the current system.
She notes that current pensions are no longer sufficient to cover basic needs, in what she describes as an “inverse relationship” between income and expenditure; household income decreases after retirement while its obligations grow, driven by rising housing costs, persistent inflation, health burdens, and continued education expenses as a result of delayed marriage age.
Regarding informal labor, the researcher affirms that dealing with it is still based on temporary subsidies rather than a framework of sustainable social protection, despite the existence of legal texts allowing its incorporation into the insurance system. She attributes the low uptake to the absence of regular income, low insurance awareness, and the priority of daily needs over long-term savings.
She holds that addressing the crisis requires moving from temporary solutions to structural reforms that include improving working conditions, expanding the social protection umbrella, and providing a comprehensive insurance system guaranteeing health insurance, disability compensation, and death pensions, in a way that builds citizens’ trust in the system and ensures them a dignified life after retirement.
Concurrent with this controversy, the Egyptian House of Representatives is discussing another draft law targeting a second consecutive amendment to certain provisions of the Social Insurance and Pensions Law. The new draft includes proposals to raise the minimum pension to 4,000 Egyptian pounds ($76.92), alongside linking the annual pension increase to inflation rates, so that periodic increases are paid starting from the first of July each year according to the average annual inflation rate, with a maximum increase ceiling not exceeding 20%, balancing improvements to pension holders’ incomes with the preservation of the financial sustainability of the insurance system.
The draft law includes a recalculation of the insurance wage in line with current wage levels and economic variables, with the aim of improving future pension values, in addition to introducing an additional financial bonus to be paid to insured persons whose insurance contribution period exceeds 35 years. The draft also includes allowing the insured person to continue working after reaching the age of sixty in the event of not completing the subscription period required to receive an old-age pension, with continued payment of insurance contributions until the required period for pension entitlement is met.
In this context, MP Fridi al-Bayadi, a member of the House of Representatives for the Egyptian Social Democratic Party, says that the low real value of pensions in Egypt is no longer merely an economic challenge but represents a clear breach of constitutional obligations.
He explains to Zawia3 that Article (17) of the Egyptian Constitution obliges the state to guarantee social insurance services and ensure a dignified life for pension holders, which is not being achieved given the continuous erosion of purchasing power, stressing that “it is impermissible to impose the cost of economic crises on pension holders,” affirming that they have fully played their role toward the state, and it is unacceptable for them to become the most harmed group and least capable of meeting their basic needs.
The MP affirms that the minimum pension must not be less than the minimum wage but should be at least equal to it, given the rising health and living burdens borne by pension holders without any capacity to increase their income.
He criticizes the continued obstruction of the executive regulations of the Elderly Rights Law No. 19 of 2024, despite its approval and ratification, arguing that this delay represents a deprivation of millions of citizens of rights that are due for enforcement. He calls for urgent action encompassing an immediate exceptional increase in pensions commensurate with inflation rates, alongside the establishment of a permanent mechanism for linking them to price indices.
He also calls for accelerating the issuance of the executive regulations for the Elderly Rights Law and activating its benefits, restructuring the pension system to guarantee a fair minimum no less than the minimum wage, and directing social protection programs more efficiently in favor of low-income pension holders. He affirms that the pension issue “is an inherent constitutional right, not a grant,” and that the continuation of current conditions represents a failure to fulfill the state’s obligation toward a category that deserves care and protection.
Kamal Abbas, for his part, holds that “the situation of pension holders can no longer tolerate further delay or procrastination,” arguing that any genuine reform of the insurance system must start from improving the living standards of retirees and guaranteeing their right to a pension that provides the minimum economic and social security.
On the mechanisms for calculating pension value, Abbas demanded a reconsideration linking them to the insured person’s real wage, alongside the adoption of periodic increases commensurate with inflation rates and guaranteeing a fair minimum for dignified living, in addition to reforming the early retirement system and expanding the social protection umbrella for informal labor.
The same point was raised by Huwayda al-Sayed, who explains that the continued neglect of pension holders in successive minimum wage increase decisions issued for state employees represents a clear gap, noting that the minimum wage rose from 1,200 Egyptian pounds ($23.08) in 2014 to 8,000 Egyptian pounds ($153.85) in 2026, while pension holders have not received comparable increases achieving “relative justice” or compensating for the decline in the purchasing power of their pensions.
In this context, the General Pensions Federation demanded the introduction of legislative amendments guaranteeing that the minimum pension be linked at a rate of no less than 80% of the minimum insurance subscription wage for regular workers, alongside equalizing pension holders with state employees in social allowances and minimum wage increases.
A number of members of the House of Representatives’ Manpower Committee also demanded the maximization of returns from investments of insurance and pension funds, in a way that improves the efficiency of the insurance system and its capacity to meet its obligations toward beneficiaries.
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Insurance Funds: From the Treasury’s Pocket to the Government’s
Since 2019, the Egyptian government began implementing the provisions of the new Insurance and Pensions Law by returning pension fund money to the National Social Insurance Authority’s account in annual installments, in an attempt to resolve the arrears crisis that accumulated over many years.
The crisis goes back to 2005, when then-Finance Minister Youssef Boutros-Ghali issued a decision to merge social insurance fund money into the general state budget, transferring responsibility for paying out pensions from the Insurance Ministry to the Finance Ministry and allowing the public treasury to use these funds as if they were part of its ordinary resources “instead of remaining in a separate account designated solely for pension holders.”
According to previous press statements by the head of the General Union of Pension Workers, Said al-Sabbagh, the government’s debt to pension funds reached approximately 642 billion Egyptian pounds ($12.35 billion) in the period between 2006 and 2018, as a result of repeated borrowing from these fund assets to finance the budget deficit. The former president of the Pension Holders’ Federation, al-Badri Farghali, described what happened in press statements as “an assault on pension holders and their money, and a systematic starvation of pension holders.”
Within the framework of settling the pension fund crisis, the Egyptian parliament issued Insurance and Pensions Law No. 148 of 2019, which established a mechanism for the government to repay its debt to the funds. The law stipulates that the government repays its dues in annual installments extending over a period of up to 50 years, to gradually recover the funds’ money and achieve financial sustainability for the pension system.
According to the experts and those who shared their experiences with us, the amendments the law recently underwent did not place the stakeholders at the forefront, and that the crisis of low post-retirement income is disproportionate to the continuous rise in living costs, fuel prices, and basic commodities, alongside the increasing health burdens borne by pension holders. Experts affirm that linking pensions to inflation and price indices has become an urgent necessity to guarantee the minimum of social justice and provide a dignified life for millions of retirees whose pensions have lost a significant portion of their purchasing value in recent years.
