PART 1: THE CONSOLIDATED ACT ON SOCIAL INSURANCE

CHAPTER IV

* INSURANCE BRANCH AGAINST OLD AGE,
NON-EMPLOYMENT DISABILITY AND DEATH

PART 1

Financing

Article 33

The insurance branch against old age, disability and death shall be financed by the following :-

1. the share which the employer is responsible for the payment thereof in respect of insurance contributions amount to **11% of the wages of the insured who works for him;
2. the share which the insured is responsible for and which shall be borne by him in the amount of 7%** of his monthly wage;
   
3. the indemnity due to each insured person, in accordance with the Labour Law and pursuant to Article 15 (2);
4. the additional amounts stipulated in Article 29 of this Law and also the interests stipulated in Article 31 thereof;
5. contributions for penszions and profits thereof which are transferred, when due, from the Government Pension and Retirement Fund to the General Organisation;
   
6. the loans which shall be appropriated in the state's general budget on the recommendation of the Minister for Labour and Social Affairs after agreement with the Minister for Finance and National Economy;
   
7. profits derived from the investment of the funds of the social insurance;
8. donations and bequests made to the General Organisation for this branch of social insurance;
9. other income which is allocated to this social insurance.
   

PART 2

Eligibility for Old Age Pensions

Article 34

The insured shall be entitled to an old age pension, dependent upon the contributory period of social insurance, whether such period be continuous or interrupted, from the General Organisation in the following instances :

1. termination of employment of the insured (male) before he attains the age of 60 years provided that his period of contribution is at least 240 insurance months, or the insured (female) before she attains the age of 55 years and provided that her period of contribution is at least 180 insurance months.

The pension due shall be reduced in this case by a percentage in accordance with Schedule I, dependent upon the age of the insured at the time of the request for payment of the pension. The payment of the pension from the General Organisation shall become due, in this instance, with effect from the date of the beginning of the period in the said Schedule on the basis of which the percentage reduction shall be determined or on the day following the date of termination of employment, whichever is first.

The reduction by percentages as stated in the second paragraph of this Article shall not be valid in the event of requests for payment of pensions by the insured or his heirs for proven disability or the occurrence of death;

2. *Termination of employment of the insured (male) when he attains the age of 60 years and his period of contribution is at least 180 insurance months or insured (female) when she attains the age of 55 years and her period of contribution is at least 120 insurance months in the insurance;
   
   
3. * Termination of employment of the insured (male) after the age of 60 years or the insured (female) after the age of 55 years and when the contributory period is at least 120 insurance months in the social insurance of which at least 36 insurance months contribution shall have been consecutive during the last five years preceding termination of employment.

The period during which the insured receives daily allowances in case of his temporary disability from work for reason of employment injury, shall be included in the contributory period in social insurance in respect of three preceding paragraphs, and no contributions to the social insurance are made for these periods.

Article 35

The insured who was participating in the private schemes referred to in Article 93 and 94 of this Law has the right, upon his written request to the General Organisation to include in the period assessed for the determination of the pension for old age, disability and death, periods equal to that which his equity in the private schemes shall permit in accordance with Schedule 4 annexed hereto and these periods shall be treated on the same basis as those upon which the pension of the insured is calculated.

The insured shall also have the right to include in the period assessed for the determination of the pension for old age, disability and death a period equal to what will permit the amount of leaving indemnity paid on his behalf for service prior to this social insurance in accordance with Article 39.

* A hypothetical contribution period of sixty insurance months shall be added upon calculation of the retirement pension in case the insured, he or she, completes or exceeds the contribution period referred to in each of Clauses 2 and 3 of this Article (34) of the Social Insurance Law, whether all such period is an actual contribution period or includes a period or periods deemed legally as an insurance contribution period with regard to the insured who already retired or retires up to the end of five-years period from the effective date of Law No. 15/1987.**
The Council of Ministers may, upon the submission of the Minister for Labour and Social Affairs and approval of the Board of Directors of the General Organisation for Social Insurance, issue an Edict for extending the period referred to in the foregoing paragraph.

** The Law referred to was enacted under No. 15/1987 and was published in the Official Gazette No. 1773 dated 19 Nov. 1987 and the 5-years period will end by 30 Nov. 1992; and then the validity of adding the period of the 5-years is to be extended in virtue of Article 1 of Decree-Law No. 15/1987 to another similar period with effect from Dec. 1st, 1992 by Prime Ministerial Edict No. 6 issued on 16th March 1993.*** And as from the effective date of this Edict, retirement pensions payable by the General Organisation for Social Insurance shall be amended accordingly.
The General Organisation shall be bound to pay the retirement pensions amended accordingly and to pay the retirement pensions due after the enforcement of this Edict and any payment received by an insured in violation of Article 136 prior to the amendment thereof, in the manner set forth shall be waived.

*** The validity of granting the five years hypothetical contributory period was extended permanently as of 1 December 1997 subject to the terms and conditions prescribed by the Prime Ministerial Edict No. 17 for 1998 published in the Official Gazette No. 2333 on 12th August 1998.

The period included shall be determined in accordance with the age of the insured, his wage at the time of the implementation of the Law in his respect and the amount paid for his account to the General Organisation in accordance with Schedule 4 attached.

Where the insured wishes to receive, upon the termination of his service, his entitlements due to him in the private schemes referred to in Articles 93 and 94 of this Law, he shall so receive cash and no previous contributory period shall be included in the contributory period for old age, invalidity and death insurance prior to that of the application of the Law in his respect.

Article 36

The insured may request an extension to the period of contribution in social insurance by payment of an additional amount, calculated in accordance with Schedule 4 attached, to the General Organisation and the amount shall be determined either on the basis of the wage at the time of commencement of participating in the social insurance or the date of presentation of the request, if later, and the said amount shall be paid either in one payment or monthly instalments in accordance with Schedule 5 attached hereto.

PART 3

Eligibility for Pensions for Disability and
Death Resulting from a Non-Employment Cause

Article 37

Where the employment of the insured is terminated by reason of disability or death not due to an employment cause and prior to the insured (male) attaining the age of 60 years or prior to the insured (female) attaining 55 years, a pension shall be due to the insured or the heirs subject to the following conditions :-

a. if the period of contribution in social insurance totals at least six consecutive months immediately prior to the occurrence of disability or of death; or

b. if the period of contribution in social insurance totals at least 12 interrupted months of which there were at least three consecutive months contribution in the social insurance immediately prior to the occurrence of disability or death.

If no disability or death occurs after having met the minimum periods of contribution referred to in the above mentioned paragraphs (a) and (b) and the insured (male) has not attained in the age of 60 years or the insured (female) has not attained the age of 55 years and contribution to social insurance cease for any reason, either of the said insured or the heirs, as the case may be, shall be of such cessation being covered by social insurance and prior to the insured (male) attaining the age of 60 years or the insured (female) attaining the age of 55 years or if death occurs within one year from the date of cessation of contributions in social insurance irrespective of age, provided that the insured may not have met the conditions for entitlement to the pension prescribed in the aforementioned Article 34(1) and that this pension was more advantageous.

The Minister for Health, in agreement with the Minister for Labour and Social Affairs, shall regulate by an Order, on presentation thereto by the Board of Directors, the method by which disability and death may be proven.

PART 4

Eligibility for Lump Sum Compensation

Article 38

Were the employment of the insured is terminated and he does not qualify under the conditions for eligibility for a pension, he shall be entitled to a lump sum compensation, and this compensation shall be paid in the following instances :-

1. the insured (male) has attained the age of 60 or more years;
   
   
2. the insured (female) has attained the age of 55 or more years;
   
   
3. if the insured (female) was married, divorced or widowed on the date of lodging a claim for payment;
   
   
4. * emigration of the insured; male or female;
   
   
5. * departure of an insured person from the country finally or if he has taken up employment abroad on a permanent basis or has joined a diplomatic mission in the embassy or consulate of his State;
   
   
6. the final judgement for imprisonment of the insured for a period of ten years or more; or the period remaining for the insured (male) to attain the age of 60 years or the insured (female) to attain the age of 55 years whichever is shorter;


* As modified by Decree-law No. 27/1976 published in the Official Gazette No. 1190 dated 26th August 1976.
7. total disability;
8. death;

The lump sum compensation shall be paid in case of death to:-

The aforementioned persons shall be entitled to receive the compensation if they meet the required conditions for eligibility of pensions as provided for in Chapter 6 of this Law and if two or more persons in the same category are entitled jointly, the amount shall be distributed between them equally.

If there are no heirs as detailed in the preceding sub-sections (a), (b), (c), and (d), the amounts shall devolve to the Social Insurance Fund against old age, disability and death.

PART 5

Computation of Pensions for Old-Age and Non-employment
Disability and Death and Computation of Lump Sum Compensation

Article 39*

Without prejudice to the provisions of Article 34(1), the insured (male) upon attainment of the age of 60 or more years or the insured (female) on the attainment of the age of 55 or more years shall be entitled to an old age pension derived by multiplying one fiftieth of the average monthly wage due to the insured on the basis of which the social insurance contributions were paid during the last two years of the period of contributions to the social insurance, or one sixtieth of the average monthly wage during the last contributory period, in the event that such contributory period is less than two years, multiplied by the number of completed years of contribution to the social insurance.

* The ratio was modified to one fiftieth by Prime Ministerial Edict No. 11/1989 published in the Official Gazette No. 1851 of 18/5/1989.

Article 40

In the calculation of the average monthly wage referred to in the previous Article the difference between the wage of the insured at the end of the last three years of his service or his actual service if less and his wage at the beginning thereof shall not exceed 40% but if the difference exceeds this limit then the excess shall not be considered in the calculation of the average wage on the basis of which the pension is to be calculated.

Article 41

The pension, in the case of disability or death, shall be paid on the basis of the percentage stated in Article 39 of the average monthly wages used for payment of the social insurance contributions during the last year or the period of contribution if less than this and a national period of three years shall be added to the period of contribution, provided it does not extend beyond the attainment by the insured of the age specified in Article 34(2).

The pension shall in no case be less than 40% of the average monthly wages referred to in the first paragraph of this Article.

Article 42

The insured or his heirs may request a division of the period of contribution to the social insurance, at the time of the determination of the pension or of the lump sum compensation, into separate periods provided disparity existed in the wages on the basis of which contributions to the social insurance were made.

As a condition for benefiting from the preceding provision, the requested period for separate computation shall not be less than three years and provided that the percentage variance in the wages at the end of each period exceeds 15% of the wage subject to the contribution at the end of the previous period.

The insured or the heirs may not request a division of the contributory period in social insurance into more than three periods.

The pension or lump sum compensation shall be computed for each period thereof, as referred to in the second paragraph of this Article, separately on the basis of the average monthly wage as prescribed in the preceding Article 39 or Article 41 para 1; or on the basis of the annual wage referred to in the last paragraph of Article 43, as the case may be.

The final determination of the compensation or the pension shall be the sum total of compensation or pension due in respect of the total period subject to the limitation on the maximum pension prescribed in this Law.

Article 43

The lump sum compensation referred to in Article 38 of the Law shall be computed on the basis of 15% of the annual wage of the insured multiplied by the number of completed contributory years in the social insurance and added thereto simple interest of not less than 3% thereof from the date of cessation of social insurance until the date of payment.

By "annual wage" is meant the average monthly wage subject to the contribution during the final two years of the contributory period in the social insurance multiplied by twelve or the average monthly wage in the contributory period if less than that and multiplied by the same figure.

PART 6

Voluntary Insurance against Old Age,
Disability and Death

Article 44

Every worker who contributes compulsorily to the social insurance against old age, disability and death for at least five years and who no longer possesses the conditions for coverage under this Law for any reason, is entitled to continue voluntarily in this social insurance provided that he so applies within six months following the date of non-coverage to this social insurance and undertakes thereby to pay the full insurance contributions due in respect of himself and the employer to the General Organisation.

The Minister for Labour and Social Affairs shall make an *Order, on the recommendation of the Board of Directors, determining the method of implementation of this Article.

PART 7

General Provisions for the Insurance against
Old Age, Disability and Death

Article 45

In the calculation of the period of contribution to the social insurance, a fraction of a month shall be rounded to a full month in each period; and a fraction of a year in the totals of these periods shall be rounded up to a full year if as a result thereof the insured becomes eligible for a pension.
· The Ministerial Order has been issued under No. 8/1988 and published in the Official Gazette No. 1819 dated 6 October 1988, the text published in the part of Ministerial Orders.

Article 46

In the event of the transfer or appointment of a person of either sex engaged in the Government sector and covered by the law providing pensions and retirement rewards for the Government employees, to the private, co-operative or para-statal sectors and becoming subject to the Social Insurance Law, or vice versa, both the General Organisation of the Retirement Fund and the General Organisation for Social Insurance undertake to exchange the total of contributions which have been deducted from his salary and the Government's share which has been paid to his account or the total of the share of the worker in the contributions to the social insurance against old age, disability and death and the share of the employer which has been paid for the account of the insured and added to either total an annual interest of 5% from the date he is subjected to the law under which he was formerly covered until the transfer of the totals to the General Organisation under whose Law he shall be subject. In both instances the provisions of the Law of the Fund to which the total has been transferred and shall apply together with the previous and the subsequent periods and the Council of Ministers shall make an Order for the regulation thereof.

If the transferred or appointed person had already accrued the maximum pension stipulated in the law under which he was formerly covered at the time of such transfer or appointment, then no contributions are transferred and he shall be entitled to a lump sum compensation for the new period whenever he completes the qualifying period.

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