Evaluating the financial sustainability of pension systems: The case of Morocco’s private sector pension scheme

¹ Faculty of Economics and Management/Laboratory of Economic and Public Policy Sciences, Ibn Tofail University, Kenitra, Morocco.
² Africa Business School/Laboratory of Industrial Economics and the Emergence of Africa, University Mohammed VI Polytechnic, Rabat, Morocco.
³ Laboratory of Economic and Public Policy Sciences - Faculty of Economics and Management - Ibn Tofail University, Kenitra, Morocco.

Published online: 3 February 2026

Abstract

The ageing of populations is one of the main factors contributing to financial unsustainability of pension schemes worldwide, particularly pay-as-you-go schemes. Morocco is not immune to these ageing trends, which have changed the shape of its age pyramid over time. This paper focuses on the pension system for salaried workers in the private sector in Morocco. It presents the results of actuarial modelling of this pension scheme using the “ILO-PENS” model. Developed by International Labour Organisation, this model relies on the cohort simulation method to estimate the future cost of financing pension benefits. The results of actuarial projections based on 2021 confirmed the scheme’s short-term financial unsustainability. From 2027, the scheme’s resources will no longer be sufficient to cover its expenditure. However, thanks to the accumulated reserve funds, the viability horizon extends to 2040. These results are close to the official ones published for the same year 2021[1], which validates the use of the model for assessing the impact of the reform options to be examined. In a context of pronounced ageing trends, reforming the national pension system is imperative, given that the rate of pension coverage for the elderly is among the lowest in the region, standing at 23.4%[2].