Pension funds in danger as Rs25 Billion CSG runs dry

The government’s promise to provide a pension of Rs 13,500 for citizens over 65 is in jeopardy as the country’s Contribution Sociale Généralisée (CSG) fund has already run dry.

Finance Minister Renganaden Padayachy, responding to a question in the Assembly, confirmed that out of the Rs 25.8 billion contributed, Rs 25 billion had already been spent.

The CSG, which replaced the National Pensions Fund (NPF), has caused concern among future retirees as the finance ministry has no money left to fund pensions payments.

The NPF’s board included representatives from government, employers and employees.

Opposition figures have criticised the government for abolishing the NPF and replacing it with the CSG.

However, Opposition Leader Xavier-Luc Duval and opposition MP Reza Uteem argue that the government has enough money to fund pensions promises by redirecting budgets attached to other projects.

They also suggest that the decision to cancel NPF contributions may harm future retirees if younger workers leave the country, providing few funds to repay the state’s pensions promises.

Source: l’Express