In recent years, Brazil’s economy has multiplied the strength, becoming the most dominant market in the South American continent. Today, as the economy shows signs of slowing down, recently elected president Jair Bolsonaro introduces his plans to reform the country’s pension system. Many of his predecessors have proposed pension reforms, none of which have passed through Brazilian congress. All of these reforms have cited the increasing average lifespan of citizens, the trend towards an older population, and the decreased fertility rates that have reduced the young population in Brazil over time. Here we look at who gains to benefit from Bolsonaros proposed legislation, consisting of increased minimum retirement age (M/F – 65/62), partial pensions after 20 years, and full pensions after 40.
The people most directly affected by the new system would be the employees of Brazil’s public sector, who could either gain or lose money in the long run. If these employees are able to work up through the 65/62 minimum, they would stand to benefit since they would be working more, as well as having a better chance of meeting the full pension requirement of 40 years. The odds of people being healthy enough to work for this are good, but others who fall ill before the retirement age will lose out on valuable time, as well as not reaching pension requirements. The outcome of employees would have to be dependant on the individual to prove a successful majority.
No matter the outcome of its employees, Brazil’s economy stands to gain the benefit regardless. The pension system for a long time has run massive deficits, which is why many citizens listen when any president or official discusses the matter. The debate doesn’t discuss if the system needs reform, but instead how it should be reformed. This is why the much needed legislation hasn’t been passed by several administrations, which has created the aforementioned deficit. The economy would stand to benefit from almost any reforms, although Bolsonaro claims that his proposed method would best suit the current economic climate of Brazil.
It’s hard to say how the changes will affect employees, but seeing as these changes would be phasing in for a 12-14 year period, it would take over a decade to acquire and hard results, provided the administration can pass this legislation and crucial campaign promise.