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    Government Will Not Deduct 14% from Employees’ Wages for Pensions

    The government denies that it will deduct 14 percent from the wages of public sector employees for their pensions.

    02 Jan 2019

    Rabat – The government of Saad Eddine El Othmani has denied that it will deduct 14 percent from the wages of public sector employees for their pensions starting January 2019.

    “The deduction is set at 1 percent of the emergency pension reform, with the state committing to a contribution of 1 percent as the operator,” read a statement from the government.

    Earlier this month, Moroccan news outlets reported that El Othmani’s government would deduct 14 percent from the wages of public sector employees for their pensions.

    The deduction was to come under Law No. 71.14 adopted by Abdelilah Benkirane’s government in 2016. The law also gradually extends the age of retirement from 60 to 63 years, starting in 2024.

    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.

    The decision angered public employees and labor unions who have been calling for a salary raise.

    Several labor unions and political parties called on the government to increase employees’ salaries and improve social dialogue unions and the government.

    The Al Istiqlal party presented recommendations to Parliament meeting in May, suggesting protection of purchasing power and support for employment.

    The government has been calling for more social dialogue with citizens to minimize inequalities at the request of King Mohammed VI.

    In July, the King reiterated the need to reform Morocco’s development strategy. He also called the government to reinforce social dialogue, stating that it is “necessary and it should be an ongoing process.” Furthermore, he said, the cabinet should meet more frequently with labor unions, “regardless of the potential outcome of that dialogue.”

    Morocco’s public sector has approximately 700,000 employees. Over 580,000 work for the central government, 150,000 work in the urban communities, and 130,000 work in public institutions.

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