the increase in the eligibility age to benefit from the Basic Retirement Pension, he will state whether, in…
(No. B/321) Ms J. Bérenger (First Member for Vacoas & Floréal) asked the Prime Minister, Minister of Defence, Home Affairs and External Communications, Minister of Finance, Minister for Rodrigues and Outer Islands whether, in regard to the increase in the eligibility age to benefit from the Basic Retirement Pension, he will state whether, in the context of the preparation of the forthcoming Budget, his Ministry has carried out any study or socio-economic impact assessment of the effects thereof on vulnerable groups, including low-income earners and, if so, indicate the main findings and conclusions thereof.
Madam Speaker, as the hon. Member is aware and is indeed the whole population, the previous Government left us with a disastrous fiscal position. Public finances were in a mess and they had left the country with a public debt of nearly 90% of GDP and a budget deficit of 9.3% of GDP. The economy had thus been irresponsibly managed over the past decade. Both the IMF and the World Bank had sounded the alarm on the imperative of reforming our pension system years back. In its report in 2015 entitled “Pension Reforms in Mauritius: Fair and Fast – Balancing Social Protection and Fiscal Sustainability”, the IMF stated that the reform of our pension system was now necessary and unavoidable. Moody’s was on the verge of downgrading Mauritius to junk status. As Minister responsible for finance, I promptly took decisive measures in my very first budget to address and correct the situation. We are, Madam Speaker, among the very few countries in the world, if not, probably the only one where the eligibility age for the BRP – which I want to emphasise – is a non- contributory pension, is lower than the normal retirement age. I do not think in any other country this happens; it has been 65 years since 2018. Furthermore, the cost of the BRP had become increasingly unsustainable, the words that are used in various reports. It had increased from 1.9% of GDP in 2010 to 7.8% of GDP in 2024-2025. Similarly, the percentage of BRP expenditure in Government recurrent expenditure increased from 9.6% in 2010 to 14.2 % in 2015-2016, and further to 24.5% in 2024-2025. These figures clearly illustrate the growing fiscal pressure on public finances. Without reforms, expenditure on the BRP would have been unsustainable. The situation is such that, without reform, we risk a future where there will be no pension for any person who is retiring neither today nor tomorrow. In addition, this significantly constrains our fiscal space thereby limiting our ability to allocate adequate resources in health, education and housing which are vital for our long term social and economic development. Government, therefore, took a decisive action to address the issue in order to ensure a strong and reliable pension system for generations to come. Madam Speaker, if no action would have been taken by this Government, it would have become impossible to sustain our welfare state as the cost of BRP would have reached Rs100 billion in 2035. The actual figure for BRP was Rs55.3 billion for Financial Year 2024-2025, that is, if you look at it, more than the budgets for – (a) Health, which is Rs17.2 billion; (b) Education, which is Rs19.4 billion; (c) Housing, which is Rs2.2 billion, and also (d) Police Services, which are Rs12.6 billion. I think these figures speak for themselves. Accordingly, we have decided to gradually increase the eligibility age for BRP from 60 to 65. I want to point out that it is a gradual increase and those who have turned 60 before the budget, they are still getting their pension at the age of 60. That is over a period, we started this gradual process from 01 September 2025. I wish to remind the House that with a view to avoiding sudden hardship for our elderly who are impacted by the reform and protecting the vulnerable groups, including low-income earners, Government set up two Inter-Ministerial Committees to look into the matter. In the interest of time and expediency, the Committees were subsequently merged. The Committee had studied and assessed the impact of the pension reform with a view to come up with various options and possibilities to support those affected by the reform, particularly the poor and the vulnerable groups. On this basis, two main measures were proposed by the Committee. The first measure was the implementation of an Income Support, through the MRA, to all those who are no longer eligible for BRP, provided that – (a) for a single individual, his or her monthly income does not exceed Rs10,000, and (b) for a couple, the monthly household income does not exceed Rs20,000. This support aims at covering a range of beneficiaries including housewives, retirees, employees and self-employed persons who rely mainly on the BRP instead of focusing only on persons in sectors with difficult conditions. We looked at that but we decided to do it that way. The monthly Income Support was set on Rs10,000 in September 2025, it has now been increased to Rs10,370 in January 2026, that is, full compensation was given to the loss in purchasing power due to inflation. The second measure provides for the beneficiaries of Basic Invalidity Pension, the Basic Widow’s Pension and the Invalidity Allowance, who turn 60 years of age, to continue to receive their respective pensions until they qualify for the BRP. Madam Speaker, as the House is aware, Government has also set up a Commission of Experts on Pension Reform in September of last year. They were to look at the pension system globally and make recommendations to reform the three pillars of our pension system, including the pillar one, that is, the Basic Retirement Pension. As regards the next Budget, the hon. Member will understand that I cannot reveal the policy measures now, but I will be announcing them in the budget.
Thank you. Yes, one question.
Je vous remercie. Je ne demandais pas les policy measures qui serons prises dans le prochain budget. Ma question concernait précisément si une étude de l’impact socio-économique de la réforme a été faite avant le budget qui arrive.
Yes. We did – I cannot say it was a thorough study because there was a question of time but we are still going on doing this to check what in fact will be the impact.
Okay. Deuxième.
Who is checking this impact? The committee?
This is done by the Ministry of Finance and also in conjunction with the Ministry of Social Security.
Okay. Next question, hon. Dr. Aumeer! SEAPORTS & AIRPORTS – BORDER CONTROL – DRUG SEIZURES – OFFICERS POSTING