Employment law
Pension: Old-age allowance in Mali
Five in the morning, Boulangerie Soleil du Sahel. The smell of warm bread fills the street as Fatoumata opens the till, as she has done every day for eight years. At 53, she wants to stop to look after her grandchildren and asks the manager: “Will I get a pension?”. He says “yes” without checking. He is half wrong, and that half matters.
Boulangerie Soleil du Sahel and the people mentioned in this article are fictitious: they are used as examples only.
1. What exactly are we talking about?
Boulangerie Soleil du Sahel employs 30 people in Bamako. Fatoumata joined at 45; she had never contributed before. At 53, she therefore has eight years of insurance with the National Social Security Institute (INPS).
To be entitled to a retirement pension, at least thirteen years of salaried employment giving rise to contributions are required (Social Security Code, article 143). Fatoumata does not have them. The Code provides a solution for this case: the old-age allowance.
The old-age allowance is a fixed-amount benefit paid by the INPS to an insured person who stops all salaried activity without meeting the conditions for a pension. It requires four cumulative conditions (Social Security Code, article 147):
- having completed at least six years of insurance;
- having reached the age of 53;
- stopping all salaried activity;
- not meeting the conditions required for the retirement pension.
The INPS calls this benefit the solidarity allowance, a term also used in the Labour Code (article L.55). It adds two requirements: not having resources above 80% of the last salary received, and filing the application within two years of stopping work.
| Insurance period when stopping work, after 53 | Old-age benefit |
|---|---|
| Less than 6 years | No old-age benefit |
| 6 years to less than 13 years | Old-age allowance, a flat amount (article 147) |
| 13 years or more | Retirement pension, early with a reduction between 53 and 55 (article 144) |
Why this rule? It prevents a contributory career too short for a pension from giving entitlement to nothing, without offering the same level as a full career.
The most common mistake
Using a threshold of three years of insurance. The text in force requires at least six years. With five years of contributions, an employee who stops at 53 is entitled to no old-age benefit at all.
Six years for an allowance, thirteen years for a pension: in between, the contribution period decides.
2. The amount: fixed, not calculated like a pension
The old-age allowance depends neither on salary nor on the number of years contributed beyond six. It is flat-rate: equal to the minimum pension provided for in article 156 (article 147). This minimum results from two rules: the pension is 26% of average monthly remuneration for 156 months of insurance, and that remuneration cannot be set at less than twice the SMIG (Social Security Code, article 156).
The SMIG is the guaranteed interprofessional minimum wage, set by decree. The INPS sums up the calculation in one formula: twice the SMIG, multiplied by 2% and by 13 years.
Example. With a SMIG of XOF 40,000 per month, Fatoumata’s allowance is calculated as follows.
Minimum base: 40,000 × 2 = XOF 80,000
Rate of the reference pension: 13 years × 2% = 26%
Old-age allowance: 80,000 × 26% = XOF 20,800 per month, i.e. 52% of the SMIG
The mistake that distorts calculations
Calculating the allowance “in the same way as the pension”, based on actual salary. Fatoumata earned XOF 150,000 per month: her allowance does not depend on it. She receives the same amount as an employee paid the SMIG.
What you need to do
- Check the employee’s exact insurance period on their INPS statement before any departure after 53.
- Explain to the employee that the allowance is a fixed amount, equal to the minimum pension.
- Compare in writing the allowance with the pension they would obtain by reaching thirteen years of insurance.
3. Leave now or hold on until 13 years?
For Fatoumata, the question is not only “am I entitled to something?”. It is “how much do I lose by leaving now?”. She holds a category C job: in the private sector, the retirement age is set at 58 for categories B, C, D and E, and at 60 for category A (Labour Code, article L.60). She can therefore work until 58.
Example. If Fatoumata stays until 58, she reaches thirteen years of insurance. Her average monthly remuneration over the last eight years would be XOF 150,000.
Pension at 58 with 13 years of insurance: 150,000 × 26% = XOF 39,000 per month
Allowance if she leaves at 53: XOF 20,800 per month
Difference: 39,000 − 20,800 = XOF 18,200 per month, for the whole of her retirement
What the employer owes when she leaves
The Labour Code covers the employee who permanently stops working to start receiving “their retirement pension, or the solidarity allowance”. They then receive a retirement payment, calculated like severance pay: 20% of the average monthly salary of the last twelve months per year for the first five years, 25% from the 6th to the 10th year (Labour Code, article L.55 and article L.53).
Example. Fatoumata has eight years of service and an average monthly salary of XOF 150,000 over her last twelve months.
Years 1 to 5: 5 × 20% = 100%
Years 6 to 8: 3 × 25% = 75%
Total: 175% of average monthly salary
Payment: 150,000 × 175% = XOF 262,500
Before 55, a departure decided by the employee follows the rules on resignation: written notification and notice period (articles L.40 and L.41). Only from 55, or 57 for category A, does retirement at the employee’s initiative not count as a resignation (article L.60 bis).
Leaving at 53 with eight years of contributions means trading a pension for a minimum.
What you need to do
- Check the employee’s category and statutory retirement age before discussing it with them.
- Calculate the retirement payment using the scale in article L.53 and pay it on departure.
- Require a written letter and apply the notice period if the employee leaves before 55.
4. A closer look: a personal allowance, with no reversion
Reversion is the transfer of part of a benefit to the spouse and children when the holder dies. The Code grants a survivor’s pension on the death of the holder of a retirement, disability or early pension (Social Security Code, article 152). The old-age allowance is not on that list.
In other words, if Fatoumata dies after her allowance has been paid out, her family will not receive a survivor’s pension on that basis. This is one more reason to compare the two options before leaving.
The formalities, and the cost of delay
The application must reach the INPS within two years of stopping work. The allowance takes effect on the first day of the calendar month following receipt of the application: every month of waiting is a month lost.
Example. Fatoumata stops work at the end of June. Her application only reaches the INPS in October, instead of July.
Application received in July: allowance due from 1 August
Application received in October: allowance due from 1 November
Loss: 3 months × 20,800 = XOF 62,400, never recovered
The file includes the INPS application form, the employment and earnings certificate completed by the employer, the certificates of employment from all employers, the payslips and a life certificate. The employer also declares the end of the contract to the INPS within eight days (Social Security Code, article 163). See our article Old-age pension.
What you need to do
- Complete the INPS employment and earnings certificate as soon as the employee leaves.
- Advise the employee to file the application in the month they leave, and within two years at the latest.
Key takeaways in 6 points
- Use the right threshold: at least six years of insurance, and age 53, for the old-age allowance, which the INPS calls the solidarity allowance.
- Explain that its amount is fixed, equal to the minimum pension, and does not follow salary.
- Compare the allowance with the pension the employee would obtain by reaching thirteen years of insurance.
- Pay the retirement payment calculated on the severance pay scale.
- Have the application filed without delay: the allowance only runs from the month after its receipt, and the maximum deadline is two years.
- Warn the employee that the allowance does not pass to their survivors.