Universal age pensions in developing countries: The example of Mauritius



Mauritius, a small developing country located in the Indian Ocean east of Madagascar, has provided older residents with non-contributory age pensions since 1950. The scheme became universal in 1958. Mild income tests were reintroduced in 1965 and again in 2004. Targeting proved to be unpopular, and universality each time was restored. Government added a mandatory, contributory tier in 1978 that does not replace the flat, non-contributory pension. Instead, it promises participants (approximately half the labour force) an income-related benefit to top up the universal pension. The author examines Mauritius's long experience, drawing lessons from it for other developing countries.