The National Social Security CNSS Problems and Prospects

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The National Social Security (CNSS)Problems and
Prospects

• I- Historical Overview
• Bismark initiative in Germany
• Lord Beverage in UK
• Social security in W.Europe Soviet Union
  Pressure
• Medical coverage, and Social Assistance (family
  allocation, workmens compensation)
• Retirement schemes, and long term Total and
  Permanent Disability
• Unemployment Insurance and Reinsertion
  Institutions

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II- Financial Mechanism (FR)

• Profit Objective 0
• Distribution (Repartition) pay as you go
• Capitalization System
• Profit objective Rate of inflation

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III- New Global Era

• Dismantlement of the Soviet Union
• Emergence of regional trade zones in addition to
  the WTO, European Union, NAFTA, A.S.E.A.N.
• Emerging Markets
• Developing Countries
• 1 Full and open competition with Border less for
  intelligence needed .
• 2 Profound between a society protecting
  the Productivity by protecting the workers and
  a society with no protection policy.

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Modern Definition of Citizenship in the
democratic world

• Political Rights
• Civic Rights
• Social rights
• Tendency to give priority to a social welfare vs
• Tendency to underestimate the perception of the
  young intelligent generation towards their
  future security.. why

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You will live longer Life expectancy has
increased in the last 20 years thanks to medical
advance Retirement period represents 21 of our
life.
You will spend more The cost of living and
medical expenses are continuously increasing.
The medical expenses in 2000 are 3 times those
of 1981.
You want to remain independent  In Japan, in
the 50s, 80 of the parents were taken care by
their children, in 2000 this percentage is below
10 just because our changing society is subject
to financial pressures and requirements.
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IV- Lebanon

• Social Security Created in 1965 by President
  Chehab
• 1st in the Arab world
• 1st to force a social policy parallel to a
  political and/or economical orientation
• Aggressive presence of socialism in the Arab
  world

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V- Present Structure

• Board of Directors (26 members appointed by the
  Council of Ministers)
• 10 Representing the Employers
• 10 Representing the Employees
• 6 Representing the Government
• General Manager (appointed by the Council of
  Ministers)
• Head of Technical Committee (appointed by the
  Council of Ministers)

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VI- Three Branches

• Medical coverage
• Family Allocation
• End-of-service Indemnity (temporary)

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Medical Coverage

• Contribution
• - by employee 7 of the monthly salary up to
  1.500.000LL
• - by employer 2
• Total 105.000 30.000 135.000LL/month
• Benefits 80 of prescriptions
• 80 of Drs visits (max 30.000LL per visit)
• 90 of Hospital Bills (3rd Class)

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Family Allocation

• Contribution
• 6 of the monthly salary up to 1.500.000LL
• Total 90.000LL per month
• Benefits
• 60.000LL for the spouse
• 33.000LL per child max 5 165.000LL
• Max 225.000LL

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End of Service Indemnity

• Contribution
• 8.5 applicable on the monthly salary (no
  ceiling)
• Benefits
• When n lt 20y Last month salary x number of
  years of service
• When ngt20y Last Salary x 1.5 x (n-20)

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Example

• n 30 years
• Last month salary 3,000,000.-LL
• EofSI 3,000,000(2015)105.000.000,-LL
• BUT
• (1) this amount is supposed to be 1000 supported
  by the CNSS
• in fact
• (2) the Social Security supports max 20 amounts
  paid with no interests
• and in LL
• and
• the balance is supported by 80 by the employer
  (if not more)
• The employer should set up special reserves !

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Problems

• A- Structural
• B- Benefits vs Needs

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GM
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Structural Problems1- Administrative Human
Resources(1) Old structure, inexistence of
Modern Management(2) Old laws, no
vision(3) Lack of technicians at all
levels(4) No adequate software2-
Cost(1) 40.000US per employee vs 21.000US the
highest average in the market(2) Half day
work(3) Productivity reduced to a minimum and
extremely bad service3- Financial
Credibility(1) Auditors forced in only in
2000(2) Balance sheet 1996(3) No modern
financial reports(4) No modern actuarial
reports(5) Tailor made laws by politicians and
absence of governmental control results .
large deficits and technical insolvency (6) The
absence of accurate records accounts for the
members
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Vision New Law for a new structure An active
and Responsible Board Division of
Responsibilities and accountability Base for
social Studies and solutions Lead the way to
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1- Modern Retirement System
Capitalization based on medium income
Social justice guaranteed by the government
Tax for high income
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• 2- Open to all population for hospitalization as
  a 1st Step
• Finance
• Contribution through banking system
• Solidarity taxes on fuel, cigarettes, ,
  alcohol

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System The basic Pillars

• 1- Information technology
• 2- New department / New Generation of young
  talents
• 3- Efficient Management
• 4- Transparency and clear accounting procedures

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Architecture

• One Smart Card
• Centralized system
• Collection payments through banks
• Automatic payments to doctors and pharmacists
• Monthly financial balancing

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Architecture (contd)

• Solidarity Tax
• Compulsory for all Lebanese
• Compulsory for non-Lebanese working in Lebanon
• Co-insurance 90 IN hospitals and 80 OUT with a
  minimum amount

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ONE SMART CARD
Banks
Reformed System (CNSS)
Payments
Payments
Lebanese
Hospitals
Non-Lebanese workers
Pharmacists
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• Smart Card Containing all the information
  concerning our medical history

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• To be used to facilitate transactions with
  Hospitals and Pharmacies