巴西上轮养老金改革不到十年，下任总统再临改革压力

Rogério Nagamine Leo Pinheiro/Valor Less than a decade after Brazil’s last pension overhaul, the country’s next president will face renewed pressure to change retirement rules as an aging population threatens to deepen the strain on public finances. Pensions and social benefits already account for nearly half of total primary government spending, leaving the next administration with difficult choices over how to keep the system sustainable, experts say. As the balance between contributions and benefits continues to deteriorate, the presidential candidates will have to decide whether to lead a traditionally unpopular overhaul of pension rules, such as raising the minimum retirement age, or pursue alternatives including incentives for formal employment, higher government revenue, or increased transfers from the federal budget. The ratio of contributors to benefits paid by Brazil’s National Social Security Institute (INSS), the federal agency responsible for pensions and other social security payments, currently stands at 1.8. It is projected to fall to one contributor per benefit in 2054 and to just 0.6 in 2085, according to estimates by Rogério Nagamine Costanzi, a social security specialist and researcher at the government-affiliated Institute for Applied Economic Research (Ipea). In other words, there are currently 1.8 contributors for every benefit paid. That ratio will worsen without action. Brazil candidates offer few details on growing pension burden Public program review could save up to 0.9% of GDP Social security specialists broadly agree that another pension reform is needed, though they advocate different approaches and models. Some also see room to ease pressure on pension finances without introducing an entirely new framework by changing the rules governing inflation-adjusted minimum-wage increases. The presidential candidates’ official campaign platforms address pension policy only in general terms. “We urgently need to discuss another pension reform in 2027. Of course, population aging plays a major role. But in Brazil it is also linked to flaws in the pension system that amplify the effects of aging,” said Nagamine, who served as a deputy secretary responsible for the general social security system in 2019, when the last overhaul was approved. One concrete example of those flaws, according to Nagamine, is the special retirement arrangement approved this year for community health workers and disease-control agents. The measure establishes a minimum retirement age of 57 for women and 60 for men, compared with 62 and 65, respectively, for workers in general. It also restores two provisions the 2003 pension reform eliminated: parity between pension adjustments and pay increases for active public employees, and full-benefit pension rules. Parity lets retirees automatically receive the same adjustments and pay increases as active public employees. The full-benefit provision lets public employees retire under the rules in effect when they entered public service, with benefits calculated based on average earnings or their final salary before retirement. For Nagamine, automatically adjusting the minimum retirement age to keep pace with changes in life expectancy is essential to preparing a pension system for an aging population. “Around the world, future generations are retiring at increasingly older ages and under stricter rules. Two out of every three OECD countries have some mechanism for automatically adjusting their pension systems to demographic changes,” he said, referring to the Organization for Economic Cooperation and Development. Broad reform Another pension overhaul was also advocated during a recent debate at Getulio Vargas Foundation’s Brazilian School of Economics and Finance (FGV EPGE). In August, a team of social security specialists led by Paulo Tafner, president of the Institute for Social Mobility and Development (Imds), presented a broad reform proposal. “The 2019 reform was important, but it remained unfinished and does not contain the growth of pension spending in Brazil. We need a more far-reaching reform, a structural overhaul,” Tafner said. The proposal has two components. The first involves adjusting existing parameters, including the minimum retirement age; aligning retirement requirements for men and women and for urban and rural populations; automatically linking the minimum retirement age to life expectancy; and reviewing special retirement arrangements. The second goes further, proposing changes to the types of benefits provided, the system’s financing structure and its administration, including the introduction of individual retirement savings accounts. Brazil budget shift raises risk of underestimating pension costs Under a funded individual-account system, workers accumulate retirement savings in their own accounts. Brazil currently operates a pay-as-you-go system, in which contributions from active workers finance benefits paid to retirees and other recipients. Nagamine argues that another reform is needed now, partly because legislators dropped several provisions during the legislative negotiations over the previous overhaul. These included automatic adjustments to the minimum retirement age as life expectancy rises, changes to rural retirement rules, and the inclusion of state government employees. Political complexity Views differ on how extensive another reform should be. Not everyone supports far-reaching changes such as introducing individual retirement accounts. Among those who favor a more limited approach is Fabio Giambiagi, an associate researcher at Getulio Vargas Foundation’s Brazilian Institute of Economics (FGV Ibre) and a career employee of Brazil’s national development bank, BNDES. Having studied Brazil’s pension system for decades, Giambiagi recognizes the issue’s political complexity. He advocates three priorities for another round of changes: raising the minimum retirement age to 67, narrowing retirement-age differences between men and women and between rural and urban workers, and widening the gap between payments under the noncontributory Continuous Cash Benefit (BPC) program and pensions received by low-income workers. Giambiagi supports introducing some mechanism to encourage workers earning close to the minimum wage to contribute to the pension system. The BPC guarantees a monthly payment equivalent to one minimum wage to people aged 65 or older and people with disabilities whose household income per person does not exceed one-quarter of the minimum wage. No previous contributions to the social security system are required. According to specialists, this reduces the incentive for workers in that income bracket to contribute to their pensions. Giambiagi said the outlook for another reform remains uncertain. Even a more right-leaning Congress elected this month does not guarantee progress. “Political conditions have to be in place for a reform to move forward. There is a debate about pensions, but it is still early. It is nothing like 2019. That year, the government benefited from the discussions in 2017 and 2018 surrounding the pension reform proposed by then president Michel Temer, which ultimately did not go ahead.” Fiscal concerns Margarida Gutierrez, a professor at the Federal University of Rio de Janeiro’s graduate business school, Coppead, and a member of the economic monitoring group at the university’s Institute of Economics, identifies pension spending as one of Brazil’s main fiscal concerns. Expenditure is rising both because an aging population is increasing the number of benefits paid and because raising the minimum wage above inflation pushes up the minimum pension payment. Both the minimum pension and the BPC are tied to the minimum wage and follow its adjustment policy. Under the current rule, the minimum wage is adjusted annually for inflation, as measured by Brazil’s National Consumer Price Index (INPC), plus the rate of gross domestic product (GDP) growth recorded two years earlier. Benefits above the minimum wage, however, are adjusted only for inflation. One alternative specialists discuss to reduce pension expenditure is to sever the link between the minimum wage and both the minimum pension and the BPC, adjusting those payments only for inflation. That would preserve purchasing power but eliminate real increases. “There is the effect of new entrants, with additional benefits being paid because of population aging, and there is the price effect, because of the minimum wage. The combined effect is explosive,” Gutierrez said. Given the political difficulties of negotiating another pension reform, Gutierrez believes there is room to mitigate the deficit by changing the minimum-wage adjustment rule, which she said “dropped a bomb on the pension system.”