Pension Systems in Morocco Under Constant Pressure Despite Temporary Improvements
The twelfth annual report on financial stability for 2024 revealed a concerning situation for pension systems in Morocco, despite some temporary improvements in limited financial indicators.
The report, issued by Bank Al-Maghrib, the Insurance and Social Security Supervisory Authority, and the Moroccan Capital Market Authority, confirmed that these systems continue to suffer from structural imbalances that threaten their sustainability, particularly in light of increasing obligations and declining reserves.
Basic pension systems recorded both technical and structural deficits throughout 2024, even with the implementation of the first phase of wage increases following the social dialogue on April 29. These increases only contributed to alleviating financial pressure temporarily, without ensuring long-term balance.
The civil pension system (CMR-RPC) experienced the most vulnerable situation, with its reserves decreasing to 57.4 billion dirhams by the end of 2024, a decline of 7.1 percent compared to 2023, continuing its downward trend at an average annual rate of 6.4 percent over the past five years. The cumulative technical deficit for this system reached 60.3 billion dirhams since its first deficit in 2014, with 35.3 billion dirhams occurring in the last five years alone.
This depletion of reserves faced a sluggish pace of structural reforms, while financial balance remained reliant on temporary interventions that did not exceed patching the system or seeking temporary state support. The report noted that the amendments to the eligibility criteria for pensions or refunding contributions within the National Social Security Fund, despite aiming to broaden coverage, threaten the financial balance of this system in the long term.
The report emphasized that deep reform has become an urgent necessity, calling for a dual-pole system combining public and private sectors to share risks and ensure equity between generations. The outlines for this reform were established in the 2024 social dialogue agreement, aimed at enacting fair pricing, reducing unfunded deficits, and ensuring sustainable financing.
Additionally, the report highlighted the limited diversification of the investment structure of pension reserves, noting that long-term deposits of the National Social Security Fund at the Deposit and Management Fund amounted to 66.2 billion dirhams, while investments from other funds were divided into fixed-income securities at 54.3 percent, equities at 34.3 percent, and real estate investments at 10.3 percent. This underscores the need to review investment strategies to ensure stable returns that support these systems in meeting their growing obligations.
