Brazilian Lawmakers May Trim President’s Pension Overhaul Plan

Economy minister is worried about Congress passing a diluted’ version.

Brazil’s pension reform is likely to be passed in the first half of 2019, its president says, although perhaps a smaller version than he envisions.

Jair Bolsonaro told local media Wednesday that his proposal, submitted to the nation’s Congress late last month, will pass because lawmakers understand the importance of the matter. The question is how much of a change the lawmakers will accept.

Pension reform is one of Brazil’s top priorities to turn around its struggling economy. The president’s proposal aims to increase the minimum retirement ages for both men and women, extend the length that workers contribute to the social security system, and cut benefits for rural employees and military personnel. Bolsonaro projects this to generate more than 1 trillion real ($262.5 billion) in savings over the next decade.

Congress, however, may have other plans. Analysts have recently suggested lawmakers could introduce changes that would slash savings by more than half, to 500 billion real, a notion that drew the ire of Economy Minister Paulo Guedes.

“But if Congress dilutes that to only 500 [billion], you end up condemning your children and grandchildren, there’s no individual retirement funds, and the old system stays in place,” Guedes said at a Wednesday ceremony commemorating the swearing-in of Roberto Campos Neto as the new president of Brazil’s central bank.

Rogerio Marinho, secretary of social security and labor at the Economy Ministry, told Reuters that Brazil’s parliament would discuss the bill and “make modifications, even improvements.” He said a May vote is possible.

“In terms of timing, we are able to meet our deadlines. Everything will depend on the dynamics of the debating process in parliament,” he told Reuters. “We know pension reform is not an easy process. But we’re very happy to have that debate.”

The bill must pass in both houses of Congress to become law.

Bolsonaro will head to the US next week for a private meeting with President Donald Trump during which they will discuss ongoing issues in Venezuela.

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