NOTIONAL DEFINED CONTRIBUTION ACCOUNTS: AN APPLICATION TO MOROCCO

Hind El-Houjjaji () and Abdellah Echaoui ()
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Hind El-Houjjaji: Faculty of law, economic and social sciences-SOUISSI, Mohammed 5 University in Rabat, Morocco
Abdellah Echaoui: Faculty of law, economic and social sciences-SOUISSI, Mohammed 5 University in Rabat, Morocco

Review of Economic and Business Studies, 2020, issue 25, 93-108

Abstract: In order to deal with pension financial pressure, several countries have adopted notional defined contribution (NDC) system, which is a financial defined contribution system based on the Pay-As-You-Go (PAYG) principles. Investigating whether NDC could be an efficient solution for the pensions financial pressure in Morocco is a relevant question. In this paper we examine the potential financial results related to supposing a transition, in the CMR civilian regime, from PAYG system to NDC. We assume an immediate switching to NDC scheme in order to study the theoretical effects NDC can have on the actual system by using the model proposed by the French Council “Conseil d’Orientation des Retraites†(COR). Our results show that NDC could have financial benefices in the long-term, whereas it could not have in the short-term. Consequently, NDC seems to be not a relevant solution for the Moroccan pension system, so another solution should be investigated to improve the financial situation.

Keywords: notional defined contribution; social security reform; policy evaluation; CMR pension scheme; Morocco (search for similar items in EconPapers)
JEL-codes: G23 H55 J26 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:aic:revebs:y:2020:j:25:el-houjjajih

DOI: 10.1515/rebs-2020-0105

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