Rabat – The Head of Government, Saad Eddine El Othmani, declared on July 9, that in order to save pension plans, wage cuts and the retirement age would have to be increased, starting this year.
Speaking in the House of Councils, he admitted to being unable to cancel ministers and parliamentarians’ pensions. His statement came in response to the countrywide campaign for pensions’ abolition.
The civil pension plan
El Othmani’s new initiative comes after the publication of the 2017 report by the Authority For Control of Insurance and Social Welfare (ACAPS). The report reveals that pension funds in Morocco are currently facing bankruptcy.
Despite the previous government’s progressive reform of the civil pension plan, the pension funds are in acute financial crisis.
In order to solve the crisis, Abdelilah Benkirane’s government put into motion an initiative to increase both wage cuts and the age of retirement.
Both wage cuts and retirement age were set to increase incrementally. Wage cuts will reach 14% this year, while the retirement age was set at 61 in 2017 and reached 63 in 2018.
During the House of Councilors’ monthly session on general policy, El Othmani announced a further reform plan. The new reform plan which will involve Morocco’s four pension funds, as well as the relevant government sectors, is under way.
The funds affected by the reform are the Moroccan Pension Fund (CRM), the National Social Security Fund (CNSS) representing 33.4% of declared retirees.
The second two schemes are the Moroccan Inter-professional Pension Fund (CIMR) with 10.3%, and finally the Group Retirement Allowance Plan (RCAR) 6.9%.
The first step of the reform was setting the minimum pension payment at MAD 1,500 per month in the public sector, and MAD 1,000 in the private sector. The change has been in effect since January 2018.
El Othmani acknowledged, however, that any reevaluation of the pensions’ minimum amount “would threaten the plans’ equilibrium and the sustainability of their action.”
Ministers and Parliamentarians’ pension
El Othmani also said that the cancellation of ministers’ pensions was impossible.The pensions became a controversial topic in Morocco following the launch of a national campaign to cancel them in December 2015.
The campaign argued that these pensions benefit ministers and parliamentarians only, at the expense of public funds.
The Head of Government stated that “he had tried to cancel the pensions but failed as the question of ministers’ pensions is not his decision to make.”
He even appealed to the parliamentarians to revise the law on ministers’ pensions themselves. He indicated that “the cancellation of this pension is the Parliament’s responsibility and not the government’s.”
Pointing out that the issue is intra-Parliamentary, El Othmani reiterated that “the government will not subsidize this pension not even with a penny, whether it is kept or abolished.”
“This is the only bill in which the government will not intervene,” he added.