Experts from the Tunisian General Labor Union have raised concerns about the escalating financial deficits in the country's social funds, warning that the situation may lead to disruptions in public services and negatively impact beneficiaries. These warnings were issued during a workshop organized by the union's social protection and informal economy department. The experts highlighted that the combined deficit of the three main social funds - the National Social Security Fund, the National Retirement and Social Protection Fund, and the National Health Insurance Fund - has reached approximately 7 billion dinars.
According to Hadi Dhamman, a social security expert at the union, the financial deficits in the social funds began in 1993 and have persisted due to a lack of comprehensive solutions from successive governments. Instead, temporary measures have been implemented, exacerbating the financial pressures. Dhamman attributed the growing deficits to demographic changes, noting that the ratio of active contributors to pension recipients has decreased significantly, from 8.3 contributors per recipient to 2.3 contributors currently.
The demographic shift is expected to worsen, with the ratio projected to decline to 1.1 contributors per recipient by 2031, making it increasingly challenging to finance pensions amid an aging population and rising life expectancy. Dhamman also criticized the lack of diversification in funding sources for the social funds, which has contributed to the current predicament. He argued that adjusting the pension and health insurance systems, as well as implementing proactive measures, could have mitigated the situation.
The National Health Insurance Fund is particularly affected by the financial woes, as it relies on contributions from the other two funds. The deficits in these funds have resulted in delayed payments to healthcare providers, straining relationships and threatening the continuity of services. Dhamman called for separating the collection of contributions for the National Health Insurance Fund and exploring new financing mechanisms, such as introducing a new social tax.
Dhamman suggested that increasing contribution rates or the retirement age would not provide a viable solution to the deficit issue. Instead, he proposed supporting job creation in the public and private sectors, which would help achieve financial balance in the social funds. Integrating the approximately 2.5 million Tunisians working in the informal sector into the formal economy could also provide a boost to the social security system.
Boubaker Salmi, assistant general secretary of the Tunisian General Labor Union, echoed concerns about the growing deficits and their implications for beneficiaries and healthcare services. He criticized the temporary measures adopted by successive governments, citing the introduction of a solidarity contribution in 2018 and the increase in the retirement age in the public sector as examples of ineffective solutions.
The experts' warnings and proposals highlight the need for a comprehensive overhaul of Tunisia's social security system to address the pressing financial challenges. The government's inaction and lack of concrete reforms have exacerbated the situation, emphasizing the importance of collaborative efforts to find sustainable solutions and ensure the long-term viability of the social funds.
Key points
- The combined deficit of Tunisia's three main social funds has reached approximately 7 billion dinars.
- Experts warn that the demographic shift will worsen, making it increasingly challenging to finance pensions.
- Proposed solutions include introducing a new social tax and integrating informal sector workers into the formal economy.
