Morocco's Minister of Economy, Finance, and Public Performance, Fouzi Lekjaa, announced that the government's budget will solely fund the increase in the minimum pension for retirees. This move aims to prevent an imbalance in the financial stability of pension funds. As part of the finance bill, the minimum pension will rise to 1,700 dirhams per month starting January, benefiting around 500,000 individuals at an annual cost of approximately 3 billion dirhams.
Lekjaa made the announcement during a public television broadcast, emphasizing that the measure is a social choice and not a burden on pension funds. He also mentioned that the plan is to gradually increase the minimum pension to 3,000 dirhams per month by 2031. Additionally, a second initiative will raise the pension share for widows from half to the full amount received by the deceased spouse, affecting about 431,000 people at an annual cost of 7.3 billion dirhams.
The second initiative aims to maintain household income levels when a spouse passes away. Lekjaa explained that when a husband dies, the household's expenses do not decrease by half, justifying the need for this change. When asked about the situation of a widow who remarries, Lekjaa referred the question to the relevant legal framework and jurisdictions.
Lekjaa also announced that the government will present a comprehensive pension reform as soon as possible. He stated that the technical committee's consultation phase has concluded, and the government is now ready to make decisions. Lekjaa assured that the acquired rights of pension plan subscribers will be preserved.
However, the fate of retirees currently receiving more than 3,000 dirhams per month remains uncertain, with no solution announced yet. The decision to fund these pension increases from the state budget rather than pension funds has been criticized, as it shifts the financial burden without addressing the structural imbalances that the planned reform aims to resolve.
The combined cost of these two measures is substantial, representing over 10 billion dirhams in new annual expenses for the state. Lekjaa's announcement highlights the government's commitment to social welfare, but also underscores the challenges in balancing the budget while addressing pension reform.
The government's plan to increase pension payments and maintain household income levels for widows demonstrates its focus on social protection. However, the long-term sustainability of these measures and their impact on the state's finances remain to be seen. The proposed pension reform is expected to address these issues and ensure a more stable pension system.
Key points
- The Moroccan government will fund increased pension payments from its budget.
- The minimum pension will rise to 1,700 dirhams per month starting January.
- The government aims to increase the minimum pension to 3,000 dirhams per month by 2031.
