State pension - All employees must be enrolled in the national social insurance system and in most cases are eligible to benefit from the state pension plan. The state pension plan is funded by employer and employee mandatory contributions. These monthly contributions are pooled in a special fund administered by the National Authority for Social Insurance ("NASI"). The fund covers state retirement pension, medical coverage, work related injuries, old age, disability and death. To be eligible to receive the pension, the retiring employee's subscription period in the national plan should be at least 120 months.

Additional plans - Under the Alternative Private Social Insurance Law No. 64 of 1980, it is permissible for an employer to have a private pension program instead of participating in the state pension plan. This private pension program must (i) provide for better benefits that exceed what is provided for under the state pension plan; and (ii) be submitted to NASI for approval. In addition, the employer should have at least 1,000 employees or have a minimum paid-in capital of EGP 10 million. Theoretically, the alternative private pension programs are permissible. However, in practice, to our knowledge, it is rare that employers in the market adopt it.

Under current law, there is no automatic transfer of employees from their current employer to a new employer. Any "transfer" would be done individually by way of the employee's voluntary resignation from its current employer and rehiring with the new employer.

If the state pension plan is adopted (which is likely to be the case in most transactions), employers are required to enroll their employees for social insurance purposes, such that the employee transfer should be reflected with NASI by the employers. This will be done through closure of the employee's file with the current employer and their enrolment under the new employer's social insurance file.