Morocco's retirees could lose their pensions
Moroccan Prime Minister Abdelilah Benkirane confirmed the findings of numerous studies, which concluded that the country’s pension system is likely to suffer a deficit by 2014 and go completely bankrupt by 2021, leaving retirees to fend for themselves. The prime minister discussed the issue at the monthly advisory board meeting required by the constitution.
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According to Benkirane, unless the Moroccan government acts, the national pension fund will see an annual deficit of 1.28 billion dirhams in 2014, 24.85 billion in 2021, 25.66 billion in 2030, and 78.54 billion in 2061. The reason for the deficit is the rapid shift of demographics in Morocco.
The average age at which Moroccans begin contributing to the fund has risen from 24 years in 1980 to 27 years now, while the life expectancy after retirement has growth from 17.8 years to 21 in the same period. In 1983, there were 12 workers for each retiree; by 2011, that number shrank to 3 workers per retiree. If the trend continues, there will be one worker for one retiree by 2032. Thus, the expenditures of the pension fund are rapidly rising relative to the money coming in.
The Moroccan leader mentioned some proposed solutions to the situation, including increasing the retirement age to 65 and increasing employee contributions from 20% to 26%. Furthermore, Morocco could begin to require lawyers, doctors, and merchants to begin contributing.
There will be a meeting on January 24 by the National Commission for the Reform of Pension Systems to decide on appropriate reforms.
Image credit: mayanais, Flickr