Pension reform: the government's proposal will include capitalization, says Paulo Guedes | Economy

Capitalization is a kind of savings that the worker himself realizes to secure his future retirement.

The current system is distribution, in which the active worker pays the benefits of those who are retired.

"I think that a capitalization system, as we draw it, is something much more robust, more difficult, the cost of the transition is high, but we are working for future generations," he said. The Minister.

Paulo Guedes made the statement after meeting with Cabinet Minister Onyx Lorenzoni to discuss the proposal.

According to the Minister of Economy, the reform formulated by the government Jair Bolsonaro is "profound" and will serve to "democratize" the social security system, "accelerate" the growth rate and "stimulate" growth productivity.

According to Paulo Guedes, the current system is "condemned" – the government expects the social security accounts to have a balance of more than 300 billion rand this year.

"So we are simply trying to save future generations." "Save" is a double movement. First of all, you have to save the well-being that already exists, but at the same time you want to create a new system of work and social security, "said the minister.

According to the minister of the Civil House, Onyx Lorenzoni, on Wednesday will be presented to President Jair Bolsonaro the text of an interim measure aimed at combating social security fraud.

According to Paulo Guedes, the text "against fraud and the privileges "will generate a saving of R $ 17 to 20 billion a year.