Pension Reform Postponed to 2011
22 August 2008
Read by 1487 persons
After the work done by the technical commission, the Actuaria firm defined four scenarios that will be known next December.
The year 2010 will be devoted to examining the different options before making a final decision.
The Swedish model based on the individualization of pensions is of great interest.
The pension reform project, launched with great fanfare in 2003, seems to be on hold. This is the observation made by the unions, contacted by phone by La Vie éco, who deplore "the disinterest of the current government in a project that the country greatly needs". In fact, while the Jettou government had made it a priority issue, even going so far as to plan to set a definitive framework in 2007, the Abbas El Fassi government has not yet included it in its operational agenda. The Prime Minister has never convened the National Monitoring Commission for Pension Reform, of which he is the president. The last meeting of this body dates back to spring 2007, when it validated the terms of reference for the selection of the consulting firm, namely Actuaria, which was entrusted with two missions. The first is to establish a status report of the four funds that manage the pensions of a population of approximately 800,000 people, namely the National Social Security Fund (CNSS), the Moroccan Pension Fund (CMR), the Moroccan Interprofessional Pension Fund (CIMR) and the Collective Pension Allowance Scheme (RCAR). The second mission was to propose reform scenarios.
The technical commission had already submitted three options
The public authorities recognize that no meeting of the national commission has taken place since 2007. However, they emphasize that this pause does not mean a freeze or abandonment of the reform. Indeed, clarifies a source close to the file, "the technical commission is continuing its work normally, and this work is even well advanced". These statements are confirmed by members of the said commission, who add that "the Actuaria firm is still working on the diagnosis of the funds". The conclusions will be submitted to the technical commission at the end of April, which, in turn, will submit them, after examination, to the national commission for validation.
Meanwhile, Actuaria has already submitted its initial findings on the "target system of the reform" to the technical commission. According to one of the members of the latter, the firm has identified four options that are still confidential because they are not yet fully finalized. The proposals, currently under review by the technical commission, will of course be submitted to the national commission for decision.
It is important to recall that the Actuaria firm's scenarios are not the first, as three others were already developed in 2006 by the experts of the technical commission. In short, the first focused solely on the parametric reform of existing schemes, the second on the creation of two poles, one private and one public (or a single fund managing both private and public sector retirees.
In the first case, action would have been taken on the parameters of the current scheme, namely the retirement age, the contribution rate and the level of benefits. In this regard, it should be noted that the option of raising the retirement age was seriously considered in 2006 by the government. It must be said that retirement at 65 is a measure that is easy to implement and will, by its mechanical effect, postpone the deficit of the funds by 5 years, as it will result in an extension of the contribution period. This measure will have two impacts: improving the scheme's revenue and reducing the costs associated with benefit services.
The second scenario consisted of creating two distinct pension schemes: one grouping together the CNSS and the CIMR for private sector employees, and the other consisting of the CMR and the RCAR for public sector retirees. On this model, the pension funds expressed reservations insofar as mergers are complex and require preliminary measures to avoid, in the absence of balance between the schemes, injustices or harming retirees.
The third scenario simply proposed merging all the funds into a single one that would govern all retirees, whether in the public or private sector. Too revolutionary in the eyes of observers, this scheme has very little chance of being adopted.
A la carte retirement? It is considered feasible
For now, it is difficult to know whether the Actuaria firm was inspired by these three proposals. But it should be noted that its experts have taken into consideration, as is customary for any pension reform project, the basic principle of demographic compensation, which will make it possible to establish a balance between schemes with a demographic deficit and schemes with a large number of active members. In addition, the firm suggested that the technical commission consider the Swedish model. Since 2000, this country has moved from a capped benefit, as is currently the case with the CNSS (the beneficiary is guaranteed to receive a predefined monthly pension from retirement), to a benefit chosen by the insured, for which he will have to pay a corresponding contribution.
This is, in fact, an individualization of retirement rights through the creation of "notional accounts". This means that each insured person holds a fictitious individual account, and his contributions contribute to a capital that is revalued annually. The virtuality lies in the fact that there is no financial accumulation to provision future commitments. Will this model be used? Sources close to the technical commission believe that it is too early to comment on this question, but they consider that this model is interesting and that it is useful to study it more closely.
In any case, a decision will be made next December, as the firm will have to submit its final report to the technical commission. The latter will then have to study the selected scenarios before giving its opinion. According to one of its members, the commission will then give itself 12 months, i.e. the whole year 2010, to examine the Actuaria firm's proposals. This leads some unionists to say that the initially planned timetable for the reform, the implementation of which was to begin in 2010 after the Jettou government revised its forecasts upwards, is likely to be exceeded.
For the public authorities, this delay is unavoidable because of the sensitivity and delicacy of the issue. It should be recalled that it was the unions themselves who, in 2007, demanded that an external firm be commissioned to re-diagnose the existing schemes, which the technical commission had already drawn up. While some consider this a waste of time, many believe that "the approach is necessary before making a major political decision". This does not prevent the unions from worrying about the Prime Minister's lack of interest in the issue.
Aziza Belouas
Published on April 13, 2009
Posted online on April 15, 2009
La Vie Eco
The Swedish model based on the individualization of pensions is of great interest.
The pension reform project, launched with great fanfare in 2003, seems to be on hold. This is the observation made by the unions, contacted by phone by La Vie éco, who deplore "the disinterest of the current government in a project that the country greatly needs". In fact, while the Jettou government had made it a priority issue, even going so far as to plan to set a definitive framework in 2007, the Abbas El Fassi government has not yet included it in its operational agenda. The Prime Minister has never convened the National Monitoring Commission for Pension Reform, of which he is the president. The last meeting of this body dates back to spring 2007, when it validated the terms of reference for the selection of the consulting firm, namely Actuaria, which was entrusted with two missions. The first is to establish a status report of the four funds that manage the pensions of a population of approximately 800,000 people, namely the National Social Security Fund (CNSS), the Moroccan Pension Fund (CMR), the Moroccan Interprofessional Pension Fund (CIMR) and the Collective Pension Allowance Scheme (RCAR). The second mission was to propose reform scenarios.
The technical commission had already submitted three options
The public authorities recognize that no meeting of the national commission has taken place since 2007. However, they emphasize that this pause does not mean a freeze or abandonment of the reform. Indeed, clarifies a source close to the file, "the technical commission is continuing its work normally, and this work is even well advanced". These statements are confirmed by members of the said commission, who add that "the Actuaria firm is still working on the diagnosis of the funds". The conclusions will be submitted to the technical commission at the end of April, which, in turn, will submit them, after examination, to the national commission for validation.
Meanwhile, Actuaria has already submitted its initial findings on the "target system of the reform" to the technical commission. According to one of the members of the latter, the firm has identified four options that are still confidential because they are not yet fully finalized. The proposals, currently under review by the technical commission, will of course be submitted to the national commission for decision.
It is important to recall that the Actuaria firm's scenarios are not the first, as three others were already developed in 2006 by the experts of the technical commission. In short, the first focused solely on the parametric reform of existing schemes, the second on the creation of two poles, one private and one public (or a single fund managing both private and public sector retirees.
In the first case, action would have been taken on the parameters of the current scheme, namely the retirement age, the contribution rate and the level of benefits. In this regard, it should be noted that the option of raising the retirement age was seriously considered in 2006 by the government. It must be said that retirement at 65 is a measure that is easy to implement and will, by its mechanical effect, postpone the deficit of the funds by 5 years, as it will result in an extension of the contribution period. This measure will have two impacts: improving the scheme's revenue and reducing the costs associated with benefit services.
The second scenario consisted of creating two distinct pension schemes: one grouping together the CNSS and the CIMR for private sector employees, and the other consisting of the CMR and the RCAR for public sector retirees. On this model, the pension funds expressed reservations insofar as mergers are complex and require preliminary measures to avoid, in the absence of balance between the schemes, injustices or harming retirees.
The third scenario simply proposed merging all the funds into a single one that would govern all retirees, whether in the public or private sector. Too revolutionary in the eyes of observers, this scheme has very little chance of being adopted.
A la carte retirement? It is considered feasible
For now, it is difficult to know whether the Actuaria firm was inspired by these three proposals. But it should be noted that its experts have taken into consideration, as is customary for any pension reform project, the basic principle of demographic compensation, which will make it possible to establish a balance between schemes with a demographic deficit and schemes with a large number of active members. In addition, the firm suggested that the technical commission consider the Swedish model. Since 2000, this country has moved from a capped benefit, as is currently the case with the CNSS (the beneficiary is guaranteed to receive a predefined monthly pension from retirement), to a benefit chosen by the insured, for which he will have to pay a corresponding contribution.
This is, in fact, an individualization of retirement rights through the creation of "notional accounts". This means that each insured person holds a fictitious individual account, and his contributions contribute to a capital that is revalued annually. The virtuality lies in the fact that there is no financial accumulation to provision future commitments. Will this model be used? Sources close to the technical commission believe that it is too early to comment on this question, but they consider that this model is interesting and that it is useful to study it more closely.
In any case, a decision will be made next December, as the firm will have to submit its final report to the technical commission. The latter will then have to study the selected scenarios before giving its opinion. According to one of its members, the commission will then give itself 12 months, i.e. the whole year 2010, to examine the Actuaria firm's proposals. This leads some unionists to say that the initially planned timetable for the reform, the implementation of which was to begin in 2010 after the Jettou government revised its forecasts upwards, is likely to be exceeded.
For the public authorities, this delay is unavoidable because of the sensitivity and delicacy of the issue. It should be recalled that it was the unions themselves who, in 2007, demanded that an external firm be commissioned to re-diagnose the existing schemes, which the technical commission had already drawn up. While some consider this a waste of time, many believe that "the approach is necessary before making a major political decision". This does not prevent the unions from worrying about the Prime Minister's lack of interest in the issue.
Aziza Belouas
Published on April 13, 2009
Posted online on April 15, 2009
La Vie Eco
