Harnessing Digital Technologies and AI to Reform Mauritius’ Pension System: A Path to Sustainability

The recent announcement to gradually raise the eligibility age for Mauritius’ Basic Retirement Pension (BRP) from 60 to 65 has sparked significant controversy, as highlighted by the Federation of Progressive Unions (FPU) in their opposition to the measure. The FPU, led by President Enrico Permal, has criticized the decision as “anti-democratic” and lacking consultation with social partners, arguing it places undue burden on workers, particularly those in physically demanding jobs. This reform, driven by economic pressures and an aging population, underscores the need for innovative solutions to ensure the pension system’s sustainability while addressing social equity. Digital technologies and artificial intelligence (AI) offer transformative opportunities to modernize Mauritius’ pension framework, enhance efficiency, and balance fiscal responsibility with social justice. This article explores how these tools can be applied, drawing on the concerns raised by the FPU and global best practices, to create a resilient and inclusive pension system that prevents financial collapse.

The Challenge: An Aging Population and Fiscal Strain

Mauritius faces a demographic crisis that threatens its pension system. As of 2017, one in six Mauritians was over 60, with the number of pension recipients growing steadily, costing the state Rs 15.4 billion annually for the BRP alone. With an espérance of life of 73.2 years—lower than in countries like Japan (84.6 years) or Europe (over 82 years)—and a shrinking workforce due to low birth rates and emigration, the ratio of active workers to retirees is declining. This demographic shift, coupled with a non-contributory pension system funded by taxpayer money, places immense pressure on public finances. The government’s decision to raise the pension age aims to reduce this burden, but as the FPU and other unions argue, it risks exacerbating inequality, particularly for manual laborers who may struggle to work until 65.

Digital technologies and AI can address these challenges by optimizing pension administration, personalizing retirement planning, and supporting workers in extending their productive years. Below, we outline key strategies to leverage these tools, ensuring Mauritius’ pension system remains sustainable while responding to the FPU’s call for fairness and consultation.

1. AI-Driven Pension Fund Management for Fiscal Sustainability

One of the primary concerns driving the pension age increase is the state’s fiscal constraints, described as an “empty caisse” inherited by the government. AI can enhance the financial management of pension funds by optimizing investments and predicting future liabilities.

• AI-Powered Actuarial Models: Advanced AI algorithms can analyze demographic trends, economic indicators, and historical data to forecast pension liabilities with greater accuracy. For instance, machine learning models can predict life expectancy variations across socioeconomic groups, allowing policymakers to tailor pension policies to specific needs, such as earlier retirement for manual workers, as suggested by Khushal Lobine. By simulating various scenarios (e.g., different retirement ages or contribution rates), AI can help design a phased reform that minimizes economic strain while addressing the FPU’s concerns about abrupt changes.
• Robo-Advisory for Pension Investments: Mauritius could establish a contributory pension pillar, as recommended by Rubina Gunowa, to complement the non-contributory BRP. AI-driven robo-advisors can manage these funds, optimizing returns through diversified, low-cost investments tailored to Mauritius’ economic context. For example, algorithms can allocate assets to stable international markets or local sustainable projects, reducing reliance on taxpayer funds and ensuring long-term solvency.
• Fraud Detection and Cost Savings: AI can streamline pension disbursements by detecting fraudulent claims or errors, which are common in manual systems. Natural language processing (NLP) can cross-reference applicant data with government records (e.g., tax or health databases) to verify eligibility, saving millions annually. This efficiency could free up resources to support vulnerable groups, aligning with the FPU’s demand for a more equitable system.

By improving financial management, AI can reduce the need for drastic measures like raising the pension age, ensuring Mauritius avoids bankruptcy while maintaining social protections.

2. Digital Platforms for Transparent Consultation and Public Engagement

The FPU’s criticism of the pension reform as “anti-democratic” stems from the lack of consultation with unions and citizens. Digital platforms can bridge this gap, fostering participatory governance and rebuilding trust.

• Crowdsourcing Platforms: Mauritius could develop a national digital platform, similar to Iceland’s Better Reykjavik, where citizens and unions like the FPU can propose and vote on pension reform ideas. Blockchain technology could ensure transparency and immutability of feedback, addressing concerns about government accountability. Such a platform would allow the government to gauge public sentiment and incorporate suggestions, like Lobine’s proposal for tiered pensions based on occupation or income.
• AI-Enhanced Sentiment Analysis: To process large volumes of public feedback, AI tools like sentiment analysis can categorize comments from social media, forums, or the proposed platform into themes (e.g., equity, affordability). This would enable policymakers to respond to specific concerns, such as the FPU’s call for protecting manual workers, and demonstrate that consultations are meaningful.
• Virtual Town Halls: Livestreamed town halls on platforms like YouTube or Facebook, as used by Defimedia.info for debates, could be expanded to include interactive Q&A sessions moderated by AI chatbots. These bots could answer common questions in real-time, ensuring broader participation, especially for rural or less tech-savvy citizens.

Transparent consultation not only aligns with democratic principles but also reduces resistance to reforms, making implementation smoother and more sustainable.

3. AI-Personalized Retirement Planning and Financial Literacy

The FPU and other unions highlight the hardship faced by workers, particularly those in manual labor, who may not be physically able to work until 65. AI can empower citizens to plan for retirement earlier, reducing dependence on the BRP and easing fiscal pressure.

• AI Chatbots for Financial Education: Mauritius could deploy AI-powered chatbots, accessible via WhatsApp or mobile apps, to provide personalized retirement planning advice. These chatbots could assess a user’s income, occupation, and health to recommend savings strategies or private pension plans, as suggested by Gunowa’s multi-pillar model. For example, a construction worker could receive guidance on low-cost investment options to retire at 60, addressing the FPU’s equity concerns.
• Gamified Financial Literacy Apps: Digital apps using gamification can educate younger Mauritians about pensions and savings. By simulating retirement scenarios (e.g., “What if you save Rs 500 monthly?”), these apps can encourage early contributions to private pensions, reducing future reliance on the BRP. Such tools could be promoted through schools and workplaces, targeting the youth emigration issue raised by Jack Bizlall.
• Health-Linked Retirement Planning: AI can integrate health data (with consent) to predict an individual’s ability to work past 60. For instance, wearable devices could track physical strain in manual laborers, triggering recommendations for early savings or government assistance, as proposed by the two committees announced by Navin Ramgoolam.

By fostering financial independence, these tools can reduce the number of BRP claimants, ensuring the system’s affordability without blanket age increases.

4. Digital Upskilling and AI-Supported Workforce Transition

Raising the pension age assumes workers can remain productive until 65, a concern for manual laborers highlighted by the FPU and social media reactions. Digital technologies can support older workers in transitioning to less physically demanding roles, extending their careers sustainably.

• Online Upskilling Platforms: Mauritius could partner with platforms like Coursera or local institutions to offer free or subsidized digital training in fields like IT, customer service, or remote work. AI can personalize learning paths based on a worker’s skills and physical capabilities, enabling a 60-year-old construction worker to shift to a desk-based role, as implied by the need for “allocations ciblées” in the reform.
• AI Job Matching: AI platforms like LinkedIn’s Skills Insights can match older workers to suitable jobs based on their retrained skills and health profiles. This could be integrated into a government job portal, ensuring manual laborers are not forced to work in grueling conditions past 60, addressing union concerns.
• Remote Work Infrastructure: Expanding broadband access and providing subsidized devices can enable older workers to take up remote roles, such as virtual customer support, reducing physical strain. This aligns with global trends, as seen in countries like the Netherlands, where multi-pillar systems support flexible retirement.

By keeping older workers in the labor force longer, Mauritius can increase tax revenues and reduce pension payouts, stabilizing public finances.

5. AI-Enabled Social Safety Nets for Vulnerable Groups

The FPU and other critics argue that the pension age increase disproportionately affects vulnerable groups, such as manual laborers and low-income workers. AI can help design targeted support mechanisms to cushion these impacts.

• Predictive Analytics for Assistance: AI can identify at-risk groups (e.g., workers with chronic health issues or low savings) using data from health, tax, and employment records. This could inform the two committees’ work on aiding those in “difficult conditions” or with disabilities, as announced by the government. For example, predictive models could flag a 60-year-old cleaner for early pension eligibility or financial aid, addressing equity concerns.
• Dynamic Pension Adjustments: AI can enable a flexible pension system where payments are adjusted based on need, as suggested by Lobine’s tiered model. For instance, manual workers could receive full pensions at 60, while office workers receive reduced payments until 65, ensuring fairness without straining finances.
• Digital Delivery of Benefits: Mobile apps or USSD platforms can deliver targeted subsidies (e.g., healthcare or transport vouchers) to vulnerable retirees, reducing administrative costs and ensuring aid reaches those in need. This approach has been successful in countries like India with Aadhaar-linked welfare programs.

These measures would mitigate the social fallout of the reform, ensuring Mauritius upholds its welfare state principles while managing costs.

Best Practices and Implementation Roadmap

To maximize the impact of digital technologies and AI, Mauritius should adopt the following best practices:

1. Phased Implementation: Introduce reforms gradually, as criticized by Gunowa for lacking in the current plan. Start with pilot programs (e.g., AI chatbots in urban areas) and scale up based on feedback, aligning with the FPU’s call for consultation.
2. Public-Private Partnerships: Collaborate with tech firms and financial institutions to develop platforms and robo-advisors, reducing costs. For example, partnering with local banks could accelerate the rollout of contributory pension schemes.
3. Data Privacy and Ethics: Ensure AI systems comply with data protection laws, using encrypted databases and transparent algorithms to maintain public trust. Community engagement, as suggested by the crowdsourcing platform, can address privacy concerns.
4. Digital Inclusion: Invest in digital literacy programs and infrastructure to ensure rural and elderly citizens can access these tools, preventing exclusion.
5. Continuous Evaluation: Use AI to monitor reform outcomes (e.g., pension uptake, workforce participation) and adjust policies in real-time, ensuring fiscal and social goals are met.

A proposed roadmap could include:

• Year 1 (2026): Launch AI actuarial models, consultation platforms, and pilot chatbot programs.
• Year 2-3 (2027-2028): Scale up digital upskilling, job matching, and contributory pension schemes.
• Year 4-5 (2029-2030): Fully integrate AI-driven safety nets and dynamic pension adjustments, with regular public reporting.

A Sustainable and Equitable Future

The FPU’s opposition to raising the pension age to 65 reflects legitimate concerns about equity and democratic process, but Mauritius’ fiscal realities demand reform. Digital technologies and AI offer a pathway to balance these tensions, enabling smarter pension management, transparent governance, and targeted support for vulnerable workers. By adopting AI-driven financial tools, digital consultation platforms, personalized planning, workforce upskilling, and dynamic safety nets, Mauritius can modernize its pension system without compromising its welfare state ethos. These innovations, grounded in global best practices and responsive to local needs, can ensure the country avoids bankruptcy while fostering a fair and sustainable future for all its citizens.