Social Security pensions: The increase finally granted

More than two years after its validation, the increase in retirement pensions from the CNSS (National Social Security Agency) has finally been released by the Ministry of Finance. The government is getting ready to implement, via a decree, this recommendation of the Board of Directors of the fund, which dates from 2019. The five percent increase will apply to the stock of retirees constituted at the end of December 2019 with retroactive effect since January 2020. The increase will result in a minimum increase of 100 MAD and a maximum of 210 MAD per insured person. At the time, this measure was blocked because it was necessary to wait for the reform of the CNSS pension scheme, which is slow to come into being. This increase will give a small boost to the purchasing power, enough to deal with the general rise in prices. Today more than seven CNSS pensioners out of ten (senior citizens, disabled persons, and beneficiaries of the survivors’ allowance) receive less than 2,000 MAD (200 USD) per month. Only four percent of the beneficiaries have a pension of 4,200 MAD, which corresponds to the maximum granted by this scheme. Contributions are made on the basis of a salary capped at 6,000 MAD per month, which has been unchanged for several years. This increase, which was the subject of lively discussions during the Board meeting, will cost nearly 780 million MAD per year to CNSS, and at the end of September (if the decree is published), the National Social Security Agency will have to disburse more than 2 billion MAD. This will have an impact on the balance of the pension scheme. Some administrators speak of the deficit “that would occur three or six months before what was initially forecast”, a situation that underscores the urgency of a reform. However, despite the studies and diagnoses carried out, no decision has been made. Another measure contemplated is the reduction of the number of days of contributions so that a person can be eligible to claim a CNSS pension. This provision was validated during the social dialogue session held last April. The minimum number of days required to claim a pension should increase to 1,320 days versus 3,240 days today. A large segment of employees could benefit from a pension whereas until then they had only one alternative, namely, to recover the employees’ share. Employees who do not reach the level of 1,320 days could recover the employer’s and employee’s share. The terms of implementation of this system have not yet been defined and are the subject of disagreement between the administrators of the National Social Security Agency. As a result, said terms of implementation of this system would be postponed to a later date to be discussed during the social dialogue. This session of the CNSS Board of Directors meeting made it possible to take stock of the CNSS’s balance sheet in 2021, namely the increase in the number of declared employees to 3.49 million (+5.4%) and the number of businesses affiliated to Social Security to 294,000 reporting companies (+8.7%). The declared payroll increased by 13% to 170 billion dirhams while collection rates improved to 92% in 2021 versus 80% in 2020. These issues which deserve in-depth analysis were also raised, as is the case for the distribution of costs related to recruitment or investment in new branches between the different categories managed by CNSS. Another issue is that of the surpluses of 41 billion MAD, made by the compulsory health insurance of employees. “ The idea, among other things, consists in allocating part (of the surplus) to the financing of the “Family allowance” branch or even to long-term benefits”, says an administrator.

Khadija MASMOUDI