In 2019,Morocco will deduct 14 percent from the wages of public sector employees for their pensions.
The deduction comes under Law No. 71.14 adopted by the previous government led by Abdelilah Benkirane in 2016. The law also gradually extends the age of retirement from 60 to 63 years, starting from 2024.
The deduction and older retirement age are part of the government’s plan to reform the Moroccan pension fund under crisis in recent years.
Since 2014, the Moroccan pension fund (CMR) has been facing a deficit, and will operate on a “technical” deficit starting in 2018 and a total deficit in 2027.
According to a report on social protection by the Economic, Social, and Environmental Council (CECE), CMR reserves will go bankrupt in 2044, and reforms are needed to ensure long-term financial balance.
Previously, the government deducted 10 percent from salaries for pensions. Now, in the fourth year since the adoption of the reform, the government will begin deducting 14 percent. The trade unions of public employees considered the reform a blow to the purchasing power of the middle class.
Moroccans have organized several protests to overthrow the reform and have called for an increase in salaries and no more deductions.
The possibility of giving up the fourth deduction from salaries came up during the last round of “social dialogue.”
Due to the suspension of social dialogue meetings earlier this year, it is only a matter of days before the government will implement the proposed law of raising salaries for employees between grades 6 and 10 by MAD 200 monthly in 2019, and by MAD 100 monthly in 2020 and 2021.
The government, however, has not yet reached an agreement with the unions, which called for an MAD 600 monthly raise.
Morocco has about 700,000 public sector employees. Over 580,000 work for the central government, 150,000 work in the urban communities, and 130,000 work in public institutions.