“Rethinking Mauritius’ Pension System: Fairness, Sustainability and Citizen Voice”

By Ali Mansoor 

Former Financial Secretary of the Government of Mauritius, Former Lead Economist at the World Bank and Assistant Director at the International Monetary Fund (IMF)

Mauritius stands at a demographic and fiscal crossroads. Our current pension system is generous, but increasingly unsustainable. As the population ages and the ratio of workers to retirees declines, pension expenditures—already approaching 8% of GDP—could rise above 12% by the 2030s. If no changes are made, younger generations will face stark choices: higher taxes, lower benefits, or both. But rather than seeing pension reform as a purely technical problem to be solved by experts or imposed from above, it’s time to return to first principles and involve citizens directly in shaping the way forward.

At its core, a pension system exists to allow citizens to retire with dignity. This means ensuring that upon retirement, everyone can replace a reasonable share of their income—without jeopardizing fiscal stability. A well-designed pension system must strike a balance between adequacy and affordability.

We propose that Mauritius structure its pension reform around three key pillars:

1. A contributory system (the second pillar) that guarantees a minimum 50% income replacement rate for individuals who have contributed consistently over a full career.
2. A basic retirement pension (BRP) (the first pillar) that tops up low earners to ensure no one falls below the 50% threshold.
3. A voluntary savings pillar (the third pillar) with tax incentives, allowing individuals to increase their retirement income to up to two-thirds of their pre-retirement earnings.This structure is widely recognized internationally, including in OECD countries, as a robust and equitable framework for modern pension systems.

Reform, however, must be socially acceptable and politically feasible. This means protecting acquired rights and transitioning gradually. Raising the retirement age to 65 should come with exceptions for physically demanding occupations. The phasing in of income-tested BRP supplements should be done carefully, with clear thresholds and communication to ensure public understanding. The introduction of a third voluntary pillar can build on existing savings schemes, but with improved transparency, flexibility, and participation.

“Reform is not just about cutting costs or tightening eligibility — it must be embedded within a broader strategy for inclusive economic growth.”

Importantly, reform is not just about cutting costs or tightening eligibility — it must be embedded within a broader strategy for inclusive economic growth. A growing economy generates more revenues, which makes a more generous pension system fiscally viable. If Mauritius adopts a “Go for Growth” strategy—prioritizing investment, productivity, and job creation—we can afford to protect and enhance retirement security while avoiding austerity.

But perhaps the most critical element for lasting reform is legitimacy. Reform imposed by technocrats or driven by political cycles often fails. This is not only a technical issue—it is a social question that must reflect the values and preferences of Mauritian society. And that is why we propose the establishment of a Citizen Jury to lead the reform process.

What is a Citizen Jury?

The Citizen Jury is a democratic innovation developed in the 1970s in Germany and the United States. It brings together a randomly selected group of ordinary citizens, representative of society in terms of age, gender, region, income and occupation, to deliberate on complex public issues.

Citizen Juries have been used successfully in countries like Ireland (on same-sex marriage and abortion), the UK (healthcare and taxation), New Zealand (climate policy), and the US (state-level legislative reform in Oregon and Massachusetts). These citizens, assisted by experts, spend several weeks learning about the issue, questioning stakeholders, deliberating together, and formulating policy recommendations rooted in shared values.

In Mauritius, a Citizen Jury on pension reform could consist of 25 to 40 citizens, selected from the electoral register. It could be convened under the auspices of Parliament or a special independent commission appointed by the Prime Minister. International institutions such as the UNDP, OECD, IMF and World Bank could provide technical and methodological support—not as passive observers, but as active partners sharing global good practices.

Proposed timeline:
– Month 1: Selection and preparation
– Months 2–4: Sessions with experts and deliberation
– Month 5: Drafting and submitting recommendations
– Month 6: Public presentation and debate in Parliament

Within six months, Mauritius could chart a new, citizen-led path to sustainable and fair pension reform.

Mauritius has a narrow window of opportunity to reform its pension system before demographic realities make the adjustment much harder. The solution lies not only in technical tweaks or fiscal adjustments, but in reconnecting policy with the voice of the people. By returning to first principles—dignity in retirement, fiscal sustainability, and intergenerational fairness—and empowering a Citizen Jury to chart the path forward, we can build a system that serves today’s retirees, tomorrow’s workers, and generations to come.