Pension reform in Morocco: Multi-pillar approaches and informal sector integration

Abstract

Demographic shifts, fiscal pressures, and the prevalence of informal employment challenge Morocco's pension system. This study uses a dynamic microsimulation model to assess reform scenarios, including parametric adjustments, non-contributory pensions, multi-pillar systems, and incentives for informal worker participation. Key findings highlight the promise of a multi-pillar system—combining a basic social pension, mandatory contributory schemes, and voluntary savings—in achieving financial sustainability, expanding coverage, and ensuring equity. Targeted non-contributory pensions and strategies to formalize informal sector participation are also crucial. Policy recommendations stress phased implementation, institutional capacity building, and financial literacy promotion to ensure inclusive, effective reforms that secure income for all citizens. This study contributes actionable insights for policymakers navigating complex social protection challenges in developing economies.