Morocco Faces Pension Fund Reforms

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VENTURES AFRICA – Morocco planned structural reforms of its state pension system during the five-year term of the current government, including an increase in the retirement age.

Reuters quotes Prime Minister Abdelillah Benkirane as saying: “No one wants to reach a situation like in Greece… raising the retirement age is an obligation to avoid collapse.”

Moroccan retired workers have been waiting for a reform for years. But challenges to revamping the system abound.

The reform process has been long and tedious. A commission was set up nine years ago to draw up reform plans but no final solution was agreed on due to “the lack of political courage.”

The government will soon put in place an agreement with its social partners, Economy and Finance Minister Nizar Baraka said recently.

“We’re going to work with our social partners to ensure that the findings from the technical studies on the issue are implemented, particularly the introduction of a unified system and the creation of a second additional sector-based level,” he added.

According to Reuters, the deficit of the Moroccan Pension Fund (CMR) for public sector workers is currently on track to reach 1.28 billion dirhams ($151 million) in 2014, 24.85 billion dirhams in 2021 and 45.66 billion dirhams in 2030, Benkirane said.

In 2013, the CMR will start to dip into its reserves, and the reserves of all of Morocco’s pension funds will be drained by 2050 if there is no reform, the government’s High Planning Authority said in a report published last month.

The agency added that only 27 percent of Morocco’s economically active population was contributing to the pension system, against 80 percent in countries of the Organisation for Economic Co-operation and Development.

In addition to the CMR, the government operates a pension fund for private sector workers and one for workers on state contracts.

Benkirane, appointed prime minister after elections in late 2011, did not give any further details about the planned pension reforms.