Engineers syndicate urged to rethink its investment strategy

AMMAN — Several engineers want their syndicate to re-evaluate its investment strategy and to adopt a participatory approach with its members, according to Raed Haddadin, the vice president of the civil engineering unit at the Jordan Engineers Association (JEA).

Haddadin told The Jordan Times on Tuesday that the syndicate should tap investment opportunities in new fields, including construction, noting that most of the current JEA revenues are investments sold to engineers.

He said it is “illogical” that the association’s council did not make any mistakes related to pension fund investments, citing an example of losses worth JD2 million in an investment in a brokerage firm since 2009.

If an investment project is losing, the association’s council should reconsider the decision, find means to stop it and review the project’s feasibility studies, Haddadin said, stressing that the need to base such decisions on several actuarial studies, not one.

The JEA has 130,000 members, 40,000 of whom work abroad.

“Within the upcoming three to four years, the number of association members is expected to exceed 160,000,” said Haddadin, noting that the JEA is one of the biggest professional association in the country, as engineers constitute 3 per cent of the community, and are directly connected to 25 per cent of it.

He said the council’s decision to increase pension fund subscriptions by 100 per cent was not accompanied by a similar increase in pensions, adding that retirement pensions are not linked to the rising living expenses or the inflation rates.

This issue seems to hugely affect young members, who will be subject to increasing pension premiums with a fixed retirement pension, according to Haddadin.

He reiterated the need for the association council’s decision to be “transparent and participatory”, calling on the council to open up to members on where they went wrong.

Haddadin also criticised the JEA council for “insisting” on holding the general assembly meeting to discuss the new plan for the pension fund on working days, since thousands of engineers would not be able to make it to the meeting. 

“Most engineers work until 3pm, and the meeting is always scheduled to start at 3pm. What about engineers in governorates or those in Amman who finish at for example 4pm or 5pm?” he asked.

In remarks in January, JEA President Majid Tabba dismissed claims that the pension fund has failed.

The syndicate released the findings of an actuarial study which revealed that the fund reached a break-even point of equal pension subscriptions and pensions in 2014 instead of the expected year of 2017.

The fund will also reach a second break-even point — where pension subscriptions and investment profits would equal its expenditure — in 2019 instead of 2021.

The study expected a third break-even point — where the total revenues would be equal to total expenditures — to be reached in 2028 instead of 2031. 

The pension premium increase is a measure to delay the coming break-even points.