Ministry of Finance denied in a statement any combination of the money allocated for insurance and pensions and the state’s general budget, asserting that the National Organization for Social Insurance (NOSI) is an economically independent authority.
The ministry said that it had not embezzled or wasted EGP 400bn from the insurance fund “as was reported” and clarified that several measures have been taken to protect pension funds since the NOSI came under the finance ministry’s supervision in 2005.
Hoda Kamel, a Pensioners’ Solidarity Syndicate member, said the government owes pensioners EGP 600bn, since the National Investment Bank (NIB), a state bank managing public investment, had lent this money to governmental agencies “without repaying it to pensioners.”
According to Law 119 for 1980, pensions and insurance funds are committed to depositing their surplus fund into the NIB, which use these funds to finance the investments of state’s agencies. However, the statement added that “pensions and insurance funds from 1980 until 2006 have not exceeded EGP 69bn.”
The finance ministry said that pensions and insurance funds cannot benefit from the revenue of invested money, rendering them “unable to generate the needed currency to pay their beneficiaries. So funds from public and private pensions have burdened the public coffers.”
Annual increases to improve the status of pensioners have put an EGP 174.3bn burden on the annual budget from fiscal year 1980/1981 until 2012/2013, the ministry said.
Mervat El-Tallawi, former Minister of Social Insurances, a ministry dissolved in 2005, said earlier that the total debt of the state’s treasury to the pension and insurances funds was valued at EGP 435bn.
According to the statement, the Ministry of Finance has issued treasury bonds amounting to EGP 204bn “for the benefit of both the insurance and pensions’ fund”, which generates EGP 16.3bn for them annually, which the ministry said has refreshed its resources.
Earlier this month, the ministries of Finance and Social Solidarity announced that they are currently working to untie the financial entanglement between the Ministry, NOSI and NIB.
Minister of Finance Ahmed Galal noted that these efforts come as a part of the measures to disentangle the finances of public authorities such as petroleum and electricity.
The interim government decided in October to increase the pensions of government workers by 15% starting from January 2014.
Public expenditure for wages and compensations had allocated EGP 141bn from the state’s budget in the fiscal year 2012/2013, representing a 14.8% increase from the preceding year.