Brazil targets pension changes

22 Feb 19

Brazil’s president has put forward plans to revamp the country’s pensions system, a move which the government claims could save more than $270bn over the next decade.

The proposal by president Jair Bolsonaro includes a minimum retirement age of 65 for men and 62 for women. Under the current system, workers can retire after contributing to the pension system for 35 years in the case of men and 30 in the case of women. The new proposals would delay full pay out of pensions until 40 years of contributions.

Many previous governments have tried to reform the pension system, which is running at a large deficit and is expected to struggle further as the population ages.

The proposals will have to be approved by both houses of Congress, and the opposition party has already vowed to block the bill, arguing the changes would unfairly impact the country’s poorest.

Bolsonaro, who was elected last year, previously said the reform of the pension system was the new government’s number one priority.

“We need to change the rules of the pension system,” said Leonardo Rolim, the official responsible for pensions at the Economy Ministry. “People are living longer and having fewer children, which means that the working population will decrease.”

The government said the proposed new rules would be implemented over a 12 to 14 year period. Bolsonaro also proposed increased contributions to the pension system from wealthier taxpayers and creating a private system of individual savings accounts, funded by employees, as an alternative to the state-funded pension.

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