Morocco upper house approves bill on pension reform

RABAT — Morocco's upper house of parliament on Tuesday approved a draft pensions reform bill, members said, prompting labour unions to threaten legal action and step up protests against the measure which is part of government efforts to fix public finances.

Morocco, a monarchy, helped to calm its pro-democracy demonstrations during the wave of "Arab Spring" uprisings in 2011 by stepping up spending on subsidies and salaries in the public sector.

This left a hole in its public finances that Morocco has been trying repair since, introducing subsidy cuts, tax reforms and freezing public sector hiring. This has drawn protests at home but also praise from international lenders.

Three members said the upper house approved the draft bill with 27 votes in favour and 21 against. The bill still needs to be passed in a final vote in the lower house.

However, Morocco's four largest labour unions said they would escalate their protest, having blocked it for months in parliament's upper house where they control a sixth of the seats.

"We are taking it to the constitutional court because the government has broken many laws to pass this bill," said Abdelhak Hessan, a member of the upper house from the Democratic Labour Confederation (CDT).

Hessan said the CDT, which boycotted Tuesday's vote, would hold talks with other unions to decide on the other steps to take against the plan.

Morocco is expected to hold parliamentary elections next October.

The proposed changes to state pension funds include an increase in the retirement age to 63 by 2022, and would raise workers' and government contributions to 14 per cent by 2019 from 10 per cent before the reform.

The government said earlier the reform will cost 41 billion dirhams ($4.1 billion) over the next five years, and any delay will add more to the burden.