A group of five economists presented on Thursday (27) a proposal to reform Brazil's pension system that would unify the minimum retirement age at 67 for men and women and split workers' contributions into two accounts, one of them invested in financial markets under a capitalization regime. The document will be delivered to the presidential candidates, according to Folha de S.Paulo and Poder360.
The group was organized by Arminio Fraga, a former central bank president under Fernando Henrique Cardoso, and coordinated by Paulo Tafner, an economist who took part in the debate over the 2019 pension reform. Leonardo Rolim, Rogério Nagamine and Sérgio Guimarães also signed the text. "Done in a broader way, as we propose, there will be no need to discuss new reforms so soon," Tafner told Folha.
The diagnosis is demographic. Pension spending today equals 8% of GDP. Without new changes, it would reach 13% in 2070 and 17.4% in 2100, according to the study. With the reform, it would stabilize at around 10% of GDP by the end of the century. Rolim, who headed the INSS, Brazil's federal social security agency, between 2020 and 2021 and served as pension secretary under Jair Bolsonaro, told Poder360 that the population aged 65 or older has doubled since 2001, while the working-age population grew 30%.
What would change
The proposal gradually raises the minimum retirement age from the current 65 for men and 62 for women to 67 for both, in urban and rural areas, and creates an automatic trigger: the age would rise four months for every six-month increase in life expectancy. Congress rejected a similar mechanism in the 2019 reform. Women would receive a credit of 1.5 years of contributions per child, biological or adopted, capped at five children.
"In Brazil, women retire earlier as compensation for the so-called double shift. That is inadequate, because women do not become unable to work earlier than men," Rolim said.
In the deepest change, pension contributions would be split equally into two accounts. Half the balance would be invested in financial markets, under a capitalization regime. The other half would be adjusted according to the variation of the total wages paid in the country. The transition for some items would take up to 30 years.
The document is a technical proposal and is not before Congress. Part of the changes would require a constitutional amendment, known in Brazil as a PEC. Rolim said he sees no difference in the chances of approval whether Luiz Inácio Lula da Silva (PT) or Flávio Bolsonaro (PL) wins the October election, and noted that Flávio's campaign coordinator, Senator Rogério Marinho, was special secretary for pensions and labor in the Bolsonaro administration. The next step is delivering the text to the presidential campaigns, which will decide whether to include the reform in their government programs for 2027.