Reforms to Côte d'Ivoire's pension programmes have mixed results


Recent years have seen comprehensive reforms enacted in both public and private-sector pension systems in Côte d’Ivoire, culminating with the establishment of a new regime and institutions. Changes to the overall system included a gradual phasing up of the retirement age from 55 to 60 between 2012 and 2016, moving the base calculation of pension payments from 10 of the employee’s highest grossing years of income to 15; and pegging the evolution of those remittances to the increase in consumer prices rather than salaries. Additional stipulations guarantee pension payments of more than half the minimum wage, and allocate an additional stipend equal to 10% of the total outlay for every child dependent under the age of 21.

Private Pensions

Constituted as part of the 2012 reforms, private sector pensions are managed by the National Social Insurance Fund (Caisse Nationale de Prévoyance Sociale, CNPS), to which both employees and employers contribute a respective 6.3% and 7.7% of a worker’s taxable salary. Additional contributions, such as family benefits, maternity leave and workplace injury, are paid by the employer. Under this arrangement the CNPS currently provides pensions for approximately 700,000 employees in the formal private sector.

However, for the nearly 90% of the workforce that does not fall within the traditional wage framework, a new solution was needed. Recognising the gap, in 2017 the CNPS announced that it was developing three new pension schemes aimed at offering coverage to those in the informal sector. These include a supplementary pension fund for private sector employees in the formal sector already covered by the CNPS; a basic pension and benefits scheme for self-employed workers in the formal or informal sectors; and a supplementary pension fund for self-employed people with sufficient means to purchase a privately managed pension fund.

Developed in collaboration with the Africa-based global consulting group Finactu, these schemes are expected to move towards implementation by the end of 2018 and bring the number of people covered by the CNPS to over 8m people.

Beyond the advantages for informal workers, the economy will benefit from the added boost provided by the programme. As these are to be funded schemes – meaning part of the contributions received from the employers is invested – it is likely that the CNPS will become a central player in the region’s capital markets as it seeks to match returns for its long-term liabilities. In addition, it will provide coverage to a significant proportion of the population who until now had been engaging in precautionary savings in the expectation that they would have to provide their own retirement. These funds can now be released into the economy, either directly as added consumption, or indirectly through the CNPS and the capital markets.

Public Pensions

Pensions plans for government employees are managed by the General State Agent Retirement Fund (Caisse Générale de Retraite des Agents de l’Etat, CGRAE). The various benefits provided by the CGRAE include social security, an earnings-related pension scheme, spousal and children’s benefits in the event of death, and disability payments.

In late 2016 an attempt to reduce fiscal spending saw the government propose removing or limiting certain benefits. These included reducing pensions by up to 50%; increasing the retirement age from 55 to 60 (or 65 for those in the top pay scales); increasing employee contribution rates from 6% to 8.33% of salaries; and eliminating pension payments for surviving spouses in the event of a death, support for dependent children and additional payments for large families.

Due to country-wide strikes that lasted into early 2017, the government reinstated some elements of the previous regime, most notably those involving surviving spouses and dependants; however, the bulk of the reform was implemented as planned. According to the government, these concessions will carry an average fiscal cost CFA21bn (€31.5m) per year until 2032.

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The Report: Côte d'Ivoire 2018

Insurance chapter from The Report: Côte d'Ivoire 2018

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