STOP has formally written to the Pension Reform Commission (PRC) at [email protected].
Dear Mr. Prayag,
I hope this message finds you well.
Following your recent press conference, I took the time to revisit your remarks carefully and review the supporting data. After a close review of your statements, I would like to respectfully draw your attention to a fundamental error that appears to have crept into your public presentation and which, if not clarified, could significantly distort both the interpretation and the credibility of the Commission’s findings.
- Median income vs. minimum income – a crucial confusion
In your presentation, you stated that: “In 2001, the median revenue was Rs 7,500 and the pension Rs 1,500 (20%). In 2024, the pension was Rs 15,000 representing 60% of the median. Absolute poverty is Rs 4,000 per month. Relative poverty is defined as 50% of median income, i.e. Rs 12,500. Therefore, with a pension of Rs 15,000, all pensioners are above the relative poverty line.”
With respect, the figure of Rs 25,000 does not represent the median revenue but rather the minimum monthly wage in force in Mauritius. The median, by definition, is the midpoint of the distribution of all incomes, not the statutory minimum. Using the minimum as the median substantially understates the true median and leads to an overstated ratio of pension-to-income (60%), creating a misleading impression of relative generosity.
This confusion has major implications. The difference between median and minimum income is not semantic; it is structural. The median reflects the typical income of a working Mauritian, whereas the minimum reflects the legal floor. A model that uses the wrong variable will naturally skew all affordability and poverty calculations. If the actual median income is higher, as data from Statistics Mauritius suggest, then the BRP-to-income ratio is materially lower, contradicting the notion that the BRP is “too high” or “unsustainable.”
- Benchmarking against poverty lines is an incomplete measure
You also referred to absolute poverty (Rs 4,000) and relative poverty (Rs 12,500) as comparative references. However, these poverty thresholds reflect subsistence, not dignity. The BRP, by its very design, is meant to ensure that the elderly live above mere survival levels. If the BRP approximates 60% of median income, that is precisely why it prevents elderly poverty and social exclusion. It should therefore be viewed as a policy success, not a fiscal problem.
Internationally, the World Bank’s recommendation that non-contributory pensions represent “around 20% of median income” applies primarily to low-income developing countries with narrower fiscal capacity. Mauritius, being an upper-middle-income economy with a developed welfare system, cannot be evaluated by the same benchmark without contextual adjustment.
- Revisiting the analytical framework – demography is not destiny
During your remarks, you cited: “Fertility rate of 1.4, replacement rate of 2.1, and demographic decline expected by 2030… 6.7% active persons contributing as of June 2025.” While these are valid demographic observations, it is a category error to treat the BRP, a non-contributory benefit financed from the Consolidated Fund , as if it were a pay-as-you-go scheme dependent on contributors.
Affordability for the State does not hinge on headcount but on total national output, which is driven by productivity, efficiency and technological innovation.
A smaller working population does not necessarily imply a weaker fiscal capacity. If productivity per worker rises through automation, digitalisation, robotics and AI integration, the economy’s real output and taxable base can expand even with fewer people.
- Illustrating the productivity effect
Allow me to share a simple projection based on conservative assumptions:
Workforce declines by 10% over 20 years.
Labour productivity grows by 1.8% per year → productivity up 43% (1.018²⁰ ≈ 1.43).
Total output = 0.90 × 1.43 = +29% more GDP.
Even with demographic shrinkage, national income continues to rise. At +2% productivity growth, the gain exceeds 34%.
This arithmetic underscores the core fallacy in assuming that population decline equals fiscal collapse. “Décroissance” in population is not “décroissance” in prosperity when technology multiplies per-person output.
- Governance efficiency is the real sustainability variable
Each year, the Director of Audit reveals hundreds of millions of rupees in procurement inefficiencies, cost overruns and wastage within public bodies and parastatal entities.
If even half of these losses were recovered or prevented, the BRP could be funded for decades without altering the pension age or the benefit level.
Hence, sustainability must begin with public accountability before social retrenchment. I respectfully suggest that the Commission integrate governance efficiency parameters in its fiscal modelling and simulate how audit compliance, digital procurement and anti-leakage reforms would alter the long-term trajectory of pension expenditure.
- A call for analytical transparency
The Commission has announced that it will take 12–18 months to complete its work. That period offers an invaluable opportunity to engage stakeholders constructively.
To uphold your stated guiding values — clarity, transparency, equity, proportionality, and sustainability, I would encourage the publication of the Commission’s macroeconomic model, assumptions and sensitivity scenarios, including:
Productivity paths (0.5% – 3% per annum);
Labour participation effects (female, senior, migration);
Healthy life expectancy vs. longevity;
Revenue elasticity under digital reforms;
r-g dynamics (growth vs. interest rate); and
Distributional impact across income deciles.
Such openness will not only reinforce credibility but also invite evidence-based dialogue rather than public speculation.
- Conclusion and next steps
Mr. Chairman, my intention in writing is not to criticise but to ensure that our national conversation on pension reform is grounded in factual accuracy and analytical rigour.
The confusion between median and minimum income is not a small technical oversight; it changes the entire narrative of “sustainability.”
Before the Commission advances toward recommendations, this point deserves rectification.
The STOP Movement (San Tous Ou Pension) will prepare a detailed, data-backed submission addressing these matters and will include alternative fiscal strategies based on productivity growth, governance efficiency and demographic resilience. We will present it officially at a later stage within your consultation process.
In the meantime, I hope this correspondence helps clarify how critical it is to interpret the data correctly and to integrate the dimension of future productivity gains, not merely static demographic ratios, in assessing the future of our pension system.
Thank you for your attention and for your service to this important national mission.
With my respectful regards,
Dave Kissoondoyal
Founder, STOP Movement (San Tous Ou Pension)
Union Park, Mauritius
Tel/WhatsApp +230 52578703
Email: [email protected]
Website: https://www.stopm.org
Posted by Minority Voice
on Nov 7 2025. Filed under Actualités, Economie, En Direct, Featured, Politique.
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