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    Home»Investments»Retirement: The Paradoxes of the CNSS
    Investments

    Retirement: The Paradoxes of the CNSS

    February 27, 20253 Mins Read


    Despite a favorable demographic ratio of five active workers for every retiree, the pension scheme managed by the National Social Security Fund (CNSS) is facing financial strain. This paradox highlights the urgent need for reform to restore long-term financial balance and ensure the sustainability of the system in the face of increasingly pressing structural challenges.

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    “We are operating within a system that has a favorable demographic ratio, yet many individuals exit without a pension because they have not reached the threshold of 3,240 days of contributions. How can such a system become deficit-ridden?” questions Hassan Boubrik, Director General of the CNSS. During a discussion at the Economist Club, he outlined the primary causes of this situation. The first vulnerability of the system lies in its method of calculating annuities, the detrimental effects of which are now evident through the financial imbalance.

    Currently, a contributor receives a replacement rate of 50% after only 3,240 days of contributions, a level that is particularly advantageous for the insured but extremely burdensome for the pension scheme. “The annuity rate accrued during the first 3,240 days is around 3.5%, which is simply unsustainable,” Boubrik emphasizes. He explains that the initial idea was to allow for accelerated rights acquisition up to a certain threshold, followed by a rate of just 1% for the remainder of the career.

    However, many workers do not complete a full career within the system, resulting in an overall annuity rate over their career that is unsustainable. Ideally, the annuity rate should be at a sustainable level and remain constant throughout the entire career.

    Although the initial intention was not fundamentally flawed, the implemented solution has proven inadequate. The goal was to account for the reality of short and fragmented careers, as well as undeclared work, by allowing rights acquisition after 3,240 days of contributions to provide a minimum pension. However, Boubrik believes the real solution lies in strengthening inspection and control mechanisms to ensure that workers complete full careers and that contributions are properly declared.

    Another inconsistency lies in the rights acquisition mechanism: 216 days of declared work entitle a worker to an annuity. However, the number of days declared per month is 26. Multiplying this by 12 gives a total of 312 days per year. “The number of days required to qualify for an annuity should be 312, not 216. This means we are granting additional rights without corresponding contributions. These freely granted rights contribute to the system’s imbalance and will need to be funded,” Boubrik explains. Additionally, the current contribution rate, set at 11.89%, is largely insufficient to finance a replacement rate of up to 70%.

    Khadija MASMOUDI

     





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