Jan. 10 (Bloomberg) -- Morocco’s prime minister announced plans to reform the state pension system that include raising the retirement age to avoid its “collapse.”
“We will negotiate with unions, but raising the retirement age is necessary to avoid collapse,” Abdelilah Benkirane said in a speech to parliament late yesterday as he presented the draft proposal. “It cannot continue like this.” A national pension commission will meet on Jan. 23, he said.
The deficit of the Moroccan Pension Fund for public-sector workers may reach 1.28 billion dirhams ($151 million) in 2014, 24.85 billion dirhams in 2021 and 45.66 billion dirhams in 2030, the prime minister said. The accumulated deficit in 2020 will reach 125 billion dirhams, he added.
The International Monetary Fund has urged the North African country to push through changes to improve the business environment, and support higher economic growth and job creation. Redesigning the pension and subsidy systems were among its suggested policy changes.
Benkirane, elected in 2011 after King Mohammed VI shifted powers to the government as part of efforts to prevent pro-democracy protests from escalating, said the fund was losing money for several reasons, including changing demographics. He provided no further details on the proposals.
Moroccans can currently retire at the age of 60. In October, Finance Minister Nizar Baraka suggested raising it to 65.
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