Position and recommendations of the Lebanese Private Sector Network in relation to the National Social Security Fund (NSSF)
The NSSF is intended to deliver protection and social justice to workers. The influence of previous mismanagement and the continuing financial, economic and political crises which have entered their fourth year have served to magnify the problems of the NSSF to such an extent that it has become fragmented and unable to fulfill its essential objective which represents it “raison d’etre”
As a result, the Lebanese people are in practice deprived of social security, devoid of any medical coverage of consequence and lacking end of service indemnities of any worth. Social Security contributions have become akin to an imposition on the formal private sector’s employees and employers without no service in return.
NSSF has become incapable of providing services after decades of waste and suspicious management activities to which must be added the more recent collapse of the local currency.
This Fund suffers from numerous structural and organizational flaws such as:
An overly large board of directors whose mandate expired years ago and which is incapable of issuing appropriate decisions.
A confused authority matrix between managers and employees as well as the overlapping budgets of its branches.
Bad investments and particularly the investment of contributions in Lebanese treasury bills exclusively.
The accounts of the Fund are not audited or approved by the tutelary ministry. The numbers are not transparent and do not reflect the entirety of the Fund’s liabilities.
Lack of information systems except to a limited extent at the level of the central administration.
The total absence of any effective financial oversight.
The high level of wages disproportionate to similar activities in both the private and public sectors.
Widespread fraud and corruption attributable both to business entities and affiliated individuals in relation to NSSF contributions and services coupled with a weak inspection cadre.
Inability to collect contributions noting that collection has never exceeded 70% of due contributions.
Unregistered entities that do not declare their existence or their employees. This category is estimated to comprise double the number of registered entities.
It is important to point out the duality adopted by the Fund with regard to the implementation of its decisions and the unequal treatment of affiliated entities. Whereas the Fund will take no action against defaulting public entities, it will punish the formal private sector entities for any delay in paying their contributions by withholding the issuance of the NSSF clearance leading to the paralysis of that entity’s activities and particularly the ability to perform custom formalities for import or export activities or Commercial Registry formalities.
It is necessary to confront the policy of systematic destruction of the protective social security net either by shutting down the NSSF in its current form after pre-developing an alternative or by privatizing and restructuring the organization according to the best standards of transparency and deploying wide ranging information systems in order to put an end to widespread administrative corruption and make it possible for employees and employers to have access to statements of account, such that each party is able to determine its rights and obligations vis a vis the other. In all cases, it is imperative to decouple customs and other business formalities from the requirement of obtaining a social security clearance. For this, an amendment of section 65 of the social security law as implemented by decree number 13955 dated 26/9/1963 is necessary.
Beirut on 15 January 2024