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BRASÍLIA – President Jair Bolsonaro's Social Security Reform Proposal Predicts That Civil Servants Entering Career Prior to 2003 Will Only Be Automatically Entitled to Retirement (the Last Salary) and Equal Pay Adjustment the badets) when they reach the minimum age of 65 years. It is not known yet whether there will be an age difference between men and women. This rule was already part of the reform presented by President Michel Temer in Congress and the functionalist lobby strongly opposed it. However, the new economic team believes that it is necessary to maintain the anti-privilege speech to get support for reform.
The minimum age requirement would make the regimes of employees and private sector workers more equal. However, this would not affect those who are active and have already met the minimum pension requirements. These people already have acquired rights.
At the same time, the proposal provides for the untying of minimum wage retirement pensions and the provision of benefits for low-income seniors and persons with disabilities who do not contribute to the social security system and are included in the Organic Law on social badistance (Loas). Today, this group is entitled to a minimum wage when it reaches 65 years old.
The idea is that, from age 55, these beneficiaries may already have an income. One possibility is to receive $ 150 with 55, $ 200 with 57 and $ 250 with 60. Values increase gradually until the age of 65 years. However, the full figure is likely to be below the minimum wage because it would also be dissociated. This modality, called phasic badistance (by step), would be optional and only for the benefit of care.
'No Compromise & # 39;
Untying the minimum wage is inscribed in the general plan of deindexing the economy that the Bolsonaro team intends to implement. The badessment is that it helps to reverse the argument that retirement can not be lower than the national floor, because it is considered a rigid clause of the Constitution.
According to a source close to the discussions, the president has already given the outline: he does not want sudden changes or leaves certain segments "uncomfortable" to vote. This will be a possible reform, said the source, adding that the proposal had to be technically coherent to give a response to the market.
The future Minister of the Civil House, Onyx Lorenzoni, affirmed yesterday that the idea of the new president was to make the welfare reform without rushing. According to him, the government does not want a patch, but a model that will last 30 years.
– The government has no trouble in, "said the minister at a press conference at the Cultural Center of the Banco do Brasil (CCBB) in Brasilia, where the team transitional period has come together.
He said that the goal was to approve the reform in 2019, but admitted that it would be necessary to convince the new Congress and society and that it takes time:
– The Congress process will be consistent with the convictions of parliamentarians and society. To do this, it is not possible to be in the water drop. We want to approve the first year, but we must recognize that our difficulties go through a Congress that has been considerably renewed.
The technicians working on the design of the reform intend to close the text again in January and present it to Congress at the beginning of the legislative year. At that time, a source explained, "we find commonalities in various proposals". The reform of Temer would not be fully utilized as it would be contaminated and "hardly be approved".
According to an interlocutor of the transitional government, the new proposal "will not be A, B, C or D", but a new proposal with positive points from each of them. What changes is the timing and duration of the transition phase for the entry into force of the stricter rules.
This means that a progressive minimum age of up to 65 years will be set, but that it can still increase along with the increase in life expectancy. It is still possible to establish a differentiated age for women with children. In addition, changes to the value of the pension and the calculation of the pension will be part of the proposal.
Capitalization Costs
For new workers, the idea is to create a capitalization system in which everyone contributes to an individual retirement account. Under the current system of distribution, active workers finance the retirement of older workers. The capitalization will be accompanied by a modification of the social security contributions system, based on the payroll, considered deteriorated due to informality and new labor market modalities. The idea is to have a secure source of resources to support the cost of the current regime, which will lose revenue from capitalization.
The executive director of the Fitch Ratings Risk Assessment Agency, Rafael Guedes, said that the country had few conditions to bear the costs of the eventual adoption of the pension plan by capitalization. According to him, the system is expensive because it eliminates the source of funding of the distribution system. By separating the funds raised today for future pensions, the funds that finance the benefits of the present are reduced. In his opinion, the transition would only be possible if the reform of the current system was more aggressive:
– Capitalization has a high cost. The country's budget accounts do not allow this initial expenditure.
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