Parametric reform analysis of the Moroccan public pension system

Abstract

In 2016, the government of Morocco adopted a parametric reform intended to deal with the critical financial situation of the CMR civilian pension regime. We examine the robustness of this reform using the Cohort-Component population projection model to the fund's population during the period 2014-2064. Then we lead a projection of the scheme financial situation. Moreover, we project the status quo situation and an alternative scenario where we propose to increase the retirement age solely, and then compare the results with those of the 2016 parametric reform. Findings/Originality: For the three scenarios, a parametric reform will have a limited effect on the financial situation, in both the long and the short-term. In long run, it is not sufficient to solve the problem of massive increase of pension scheme deficits while in short run it is not sufficient to eliminate the existing structural problems neither to avoid the future financial deficit. Furthermore, our alternative scenario seems to have some more advantages, comparing with the other scenarios.

Keywords

• PAYG
• parametric reform
• Cohort-Component
• policy forecasting
• Morocco