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After nearly 20 years in the works, Parliament has finally passed a law amending Lebanon’s social security system, and converting its existing end-of-service indemnity system (EOSI) into a pension scheme.
The new law was minted in the Official Gazette on Dec. 28 and will launch in 2026 if all goes according to plan.
Moving away from a one-time payment, the new monthly pension system promises to offer three options to its enrollees upon retirement:
Option A: This is targeted at individuals who make close, or slightly above, the minimum wage during their lifetime.
If Worker A (let’s call her Leila) worked for 15 years (the minimum number of years to benefit from this option under the new law), she will receive 55 percent of the minimum wage (set at the time she retires) on a monthly basis until she dies. If she works for longer than those 15 years, Leila can expect to receive 1.75 percent of the minimum wage for every extra year, up to a maximum of 80 percent of the national minimum wage.
So if Leila worked for 22 years (for example), she can expect to get paid 55 percent of the minimum wage + (1.75%*(22-15)*minimum wage. Taking into account today’s minimum wage of LL9 million, her total could be LL6.05 million per month.
Option B: This is targeted at individuals who make medium-to-high salaries.
Worker B (let’s call him Abdo) can expect to make 1.33 percent for every year he worked, multiplied by his average salary over a lifetime. So if Abdo worked for 30 years, he can expect to receive 40 percent of his average salary (1.33%*30 years). Assuming his average salary was LL30 million, he can expect to get paid 1.33%*30*LL30 million, or a total of LL11.97 million per month, for the rest of his life.
Individual Savings Account: This option is targeted at everyone and will depend on the returns made by the NSSF through their investments, which would require a healthy economy and a good investment climate at the time of payout.
Luca Pellerano, Senior Social Protection Specialist at the ILO, explained to L’Orient Today that a portion of a worker’s contribution will go into a virtual individual account which should generate its own specific returns until the time they retire at the age of 64. These returns would then be converted into a monthly pension. However, under no circumstances can this pension option be lower than Option A and B. Should the individual account fall below them, then the two options will apply and be paid to the worker instead.
To find out how much your pension will amount to under the new pension system, use this calculator developed by L'Orient-Le Jour:
