Brazil Government’s New Pension Reform Bill

On Wednesday, a new version of Brazil’s unpopular pension reform bill was presented. This would require fewer years of contributions by private sector workers to receive a pension, according to a draft of the legislation, the government hopes that the bill reform will be approved in Congress.

Brazil presented a new version of it pension reform bill.

The new bill will need a minimum of 15 years of contributions from private sector workers, compared to 25 years in the previous draft and 15 in the current one.

Public servants will have a minimum of 25 years, and all workers will need to work 40 years to retire on full pension.

The bill maintains the minimum retirement age of 65 years for men and 62 years for women, a key proposal for reducing the cost of Brazil’s pension system, which is the main reason of a gaping government budget shortage.

The pension reform is the foundation policy of Brazil President Michel Temer’s efforts to bring the deficit under control, but he lacked the votes to get a stronger version approved by lawmakers who worried the unpopular measures would hurt their re-election chances next year.

President Temer used political capital blocking corruption charges that further undermined support for his policies and delayed a pension reform vote in Congress by six months.

The revamped bill contains the same retirement rules for rural workers that are in effect now.

In the current bill, rural workers will contribute for 15 years to get a pension, which is 10 years less than the government’s first proposal. According to the draft, the minimum retirement age for both female and male rural workers will be kept respectively at 55 and 60 years.

The government restored a guarantee that disabled or elderly people unable to support themselves, would receive an additional amount so their total payment meets a monthly minimum.

Rodrigo Maia, the speaker of the lower house of Congress, stated that the government did not have the two-thirds super majority of votes that needed to pass the pension reform bill.

According to Maia, the government would work to strengthen its base first, which President Temer sought to do on Wednesday by swearing in Alexandre Baldy to lead the Ministry of Cities, a move to please the Progressive Party, which has 40 seats in the chamber.

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