Why Pension Tampering is Often Perceived as A Breach of Trust

A contributory pension is a rational instrument — but only where wages are paid in a currency that does not lose its value

By Samad Ramoly

A contributory pension functions effectively only when citizens can confidently set aside a portion of their current income, trusting that its value will endure until retirement. That fundamental condition does not hold in Mauritius. 

The rupee is a slow leak, not a store of value. To ask Mauritians to contribute to a pension fund in a currency that silently erodes is to ask them to save in a depreciating asset dressed up as security. This is why the welfare state “pension” — universal, non-contributory, financed through indirect taxation — has never been seen as a simple social transfer. It has been internalised by most Mauritians as something more instinctive: a hedge. A partial, imperfect recovery of what VAT had already taken. 

Since most of what they consume is imported, and since import prices move with a rupee that knows only depreciation, the “pension” has become a silent compensation mechanism — the state returning, in monthly instalments, a fragment of the purchasing power it had extracted through the price of goods and services purchased.

But the contract does not stop there, and this is where it becomes quietly damning. Most Mauritians do not actually consume the public services their taxes fund. They pay school fees or private tutoring because they do not trust the state school. They use a private clinic because the public hospital is a place of last resort. They install an alarm system because the police is an institution they have learned to work around rather than rely upon. On top of this comes the often unbearable cost of a carer — because health declines, and their children have emigrated. A double absence that the universal “pension” does not cover.

They are, in reality, taxed twice — once by the state, and once by their own justified scepticism of what that state delivers. What emerges is not a welfare state in the classical sense. This fiscal arrangement essentially requires citizens to fund institutions they distrust, while receiving only a modest pension as partial restitution. Consequently, they are forced to privately finance the very services that the public system was originally intended to provide.

In this context, the debate on contributory pensions is almost a distraction. The primary question — the one consistently omitted from budget speeches — remains: why the rupee continues to lose ground, and who actually benefits from the silence surrounding this reality.

Mauritius Times ePaper Friday 19 June 2026