Imposing a minimum retirement age is apparently at the centerpiece of Brazil’s pension overhaul. The reform plan is ready to be submitted to Parliament, according to Rogerio Marinho, secretary of social security and labor at the Ministry of the Economy.
“Today with the team of President [Jair] Bolsonaro after discussion of the final text of the new pension plan, ready for the debate that will change Brazil,” he tweeted Thursday. Containing pension costs is seen as a way to tackle Brazil’s onerous budget deficits.
The sneak peek on the changes sets the national retirement age from to 65 for men and 62 for women. The economic team initially wanted a universal age of 65, but the president wanted to make the age for women lower, causing them to compromise. Right now, there is no minimum retirement age, per se.
Rather than define Brazil’s retirement minimum by age, the government today counts the number of years one works and contributes to the pension system. For example, if an employee puts money into the structure for at least 15 years, the earliest men can retire is 65 (60 for women). However, if they have contributed for at least 35 years (30 for women), they can retire at any age.
The average new retiree is about 55 years old. The new laws would see the average man work for 40 years before collecting benefits.
The average man lives to be 71 years old in Brazil, according to the World Health Organization. Women live to be 79.
Bolsonaro’s proposal will head to Congress on Feb. 20.
Brazil’s stock market reacted well to the news, with the Bovespa rising 2.05% after the day’s close.
Bolsonaro was able to attend the two-hour meeting with Marinho, Economy Minister Paulo Guedes, Chief of Staff Onyx Lorenzoni, and Government Secretary Carlos Alberto dos Santos Cruz, after he had been released from a 17-day stay at the hospital earlier in the week. The president had recently received surgery related to a stab wound he suffered on the campaign trail.
The new retirement age limit will gradually increase over a 12-year transition period.
After the overhaul is signed, Bolsonaro is expected to explain all changes via a televised address.
“The President will make a statement to the nation, explaining how this project, this new Social Security will be sent, discussed by Congress,” Marinho said. “We hope it will be approved soon. Brazil needs and is in a hurry to grow again. “
Public debt in one of the largest contributors to Brazil’s weakening economy. The nation’s generous pension system continues to eat bigger chunks of the country’s budget deficit, which is why the reforms are occurring. Due to social unrest and political stalemate, it has been unable to agree on proper reforms.
As the overhaul seemingly occurs, all eyes are on Bolsonaro as he seeks to achieve one of his top campaign promises within his first 100 days in office.
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