CNSS benefits in freefall

After years of contributions, many Lebanese workers are discovering that their end-of-service benefits are now worth only a fraction of what they represented before 2019. Between the collapse of the Lebanese pound, the absence of automatic cost-of-living adjustments, and the still-incomplete pension reform, the National Social Security Fund (CNSS) has become one of the most painful symbols of Lebanon’s social crisis.

For decades, the CNSS end-of-service benefit was the main safety net for private-sector employees. It was not a monthly pension but a lump sum paid at the end of a career, after 20 years of service, in case of disability, or upon death. Before the crisis, while limited in scope, it allowed a worker to recover a significant amount after years of work. After 2019, with the collapse of the Lebanese pound, this safety net was severely eroded.

How end-of-service benefits are calculated

The basic principle is simple: the benefit is mainly calculated based on the worker’s last declared salary and years of service. Typically, employees receive roughly one month of salary per year for the first twenty years, with a less favorable calculation beyond that. For example, a worker with 20 years of service earning $1,000 could theoretically expect a $20,000 benefit before the crisis.

The problem, however, is not just the formula. The real shock comes from the currency in which salaries were declared, the value of the Lebanese pound, and the exchange rate used.

Employer contributions: 8.5%

Each month, employers pay a contribution to CNSS to fund the end-of-service benefits, representing 8.5% of the salary. Before the crisis, when the dollar was officially 1,507.5 LBP, a $1,000 salary was declared at around 1.5 million LBP, making the 8.5% contribution roughly 127,500 LBP, or about $85. Today, with the market rate around 89,500 LBP per dollar, that same contribution is worth only about $1.40.

Over the years, workers contributed to a system denominated in Lebanese pounds, but the real value of those contributions collapsed with the currency. Losses have exceeded 95% in some cases. A benefit that theoretically amounted to $20,000 could now be reduced to just a few hundred dollars. Even if proposals multiply the old amounts by 30, workers would recover only about half of their original value.

Not adjusted to the cost of living

The CNSS end-of-service benefit is not automatically indexed to inflation, housing, healthcare, schooling, fuel, or the real cost of living. It depends mainly on declared salary, years of service, contributions, and the legal framework at the time of calculation. Since 2019, the cost of living has largely dollarized, making the disparity even starker.

Recent reforms

Since February 2024, social contributions on salaries paid in dollars are calculated at 89,500 LBP per dollar, bringing contributions closer to economic reality. For a $1,000 salary, 8.5% now represents around 7.6 million LBP, roughly $85 at the market rate, compared with the previous $14 at older rates. However, this does not solve the problem of old contributions accumulated during the currency collapse.

Who covers the difference?

The Lebanese system places significant responsibility on the last employer. If the CNSS funds are insufficient to cover the owed amount, the last employer may be called upon to pay the difference, creating tension between workers seeking fair compensation, companies facing double payments, and the state, which has yet to provide a full solution.

Incomplete pension reform

In 2023, Lebanon adopted a new law gradually replacing lump-sum end-of-service payments with a monthly pension system. While a significant change, implementation has been slow and complex, leaving workers caught between a devalued old system and a new framework not yet fully operational.

A deep social injustice

The CNSS crisis disproportionately affects the most diligent workers—those who contributed legally for decades, expecting their end-of-career benefit to provide security. Many now find that after 20, 30, or 40 years of work, their payout cannot cover even a few months of a decent life.

The scale of the loss

Between the old official rate of 1,507.5 LBP per dollar and the current rate of 89,500 LBP, the real value of a benefit has been divided by nearly 60. A $60,000 payout pre-crisis could now amount to just $1,000 in real terms.

Conclusion

Since 2019, CNSS end-of-service benefits have become a matter of social justice, not just administration. Calculations still rely on outdated rules, while the cost of living has skyrocketed. Workers who contributed for years have lost most of their real rights, with some losses exceeding 95%. Without a clear mechanism for indexing, equitable funding, and full implementation of pension reform, the end-of-service benefit risks remaining a symbol of a broken social promise in post-crisis Lebanon.