Jair Bolsonaro, Brazil’s right-wing president-elect, wants to make pension fixes to the nation’s system through piecemeal reforms that he believes Congress will approve, starting with a raise in the minimum retirement age.
“The idea is to start with the [minimum] age, attack the privileges, and take it forward,” Bolsonaro said at a news conference, reported by Reuters.
The incoming president wants the increases to gradually work their way into the entire country sector by sector, starting with the public social security system.
He warned that the pension system’s growing debt is becoming uncontrollable, and that Brazil should not “reach the situation that Greece reached to do something about it.”
Bolsonaro’s strategy involves raising the national retirement age by two years, while keeping the gender gap the same. This means men would have to wait until age 67 and women until 62 to retire, as long as they have at least 15 years of contributions. Men and women can also retire after 35 and 30 years of contributions.
Due to an increase in the population’s age and the number of retirees with it, Brazil’s generous pension system is becoming a bigger chunk of the country’s budget deficit and mounting public debt.
Investors and credit rating agencies are watching how this issue plays out as Brazil struggles to emerge from a two-year recession.
Pension reform was previously attempted under Michel Temer, the departing president, but his controversial agenda was heavily protested and delayed. The lack of traction caused Temer to shelve reform efforts and pass the buck to his successor.
Bolsonaro will take office on Jan. 1, and began meeting with parties on Tuesday to rally support for his plans, which also include tax reform and relaxing gun laws.