The Pension reform in Brazil was a proposal by the Brazilian government to amend the Constitution for the reform of the social security system of the country. By changing the country's constitution, it had to be approved in both houses of the National Congress by an absolute majority. The reform was created to combat the giant deficit in the pension system, of more than R$194 billion in 2018, and the rapid aging of the Brazilian population.
The original text was delivered by the President of Brazil Jair Bolsonaro to the President of the Chamber of Deputies Rodrigo Maia on 20 February 2019 to initiate the legal rite. The reform proposal was approved by the Federal Senate on 22 October 2019, becoming law and coming into force automatically. Among other details, the reform raises the retirement age and requires more time for civil service workers to receive a maximum retirement benefit.
Previous reform attempts
Until the reform was approved in 2019, other governments had tried to approve their proposals. In Brazil's most recent history, the country has been debating pension reform every ten years, in some cases the proposals have simply been shelved as extremely unpopular, in others, mini-reforms have been made, but with long-term null effects, and in one case, the reform was rejected by the Chamber of Deputies by only one vote.
Already in the 1990s, the first attempts at reform predicted that with the aging of the Brazilian population over the next 20 years, the current pension system would become unsustainable, and this has proven true in recent years, with the deficit rising each year.
Fernando Henrique Cardoso
The first president to try to reform Brazil's pension system was Fernando Henrique Cardoso in the year 1995, when he presented his proposal to amend the Constitution. The bill was only approved by Congress three years later, resulting in a very dehydrated reform that had almost no long-term impacts.
Its main point was the minimum retirement ages of 55 years for women and 60 for men. As the first attempt in the country's history, the measure was extremely unpopular, and difficult to pass. Brazil's constitution says any amendment must be approved by an absolute majority in both houses, 308 votes in the Chamber of Deputies and 49 votes in the Senate. The main point of the proposal was rejected on the night of 6 May 1998 by the House by only one vote, the deputy Antonio Kandir of the ruling party PSDB, wrongly voted in abstention, causing the defeat of the government and the proposal.
At the end of the process, Fernando Henrique only passed a law that set minimum ages of 48 (women) and 53 (men) for federal servants to retire.
Luiz Inácio Lula da Silva
In Luiz Inácio Lula da Silva administration, there was a change in social security rules, centered on federal servants. A constitutional amendment restricted the possibility of full retirement to those who entered their careers until 2003. Those who joined after that had their benefits calculated according to the average of their contribution to Social Security. Retired servers now have an 11% discount. Minimum ages increased to 55 years (women) and 60 years (men).
Dilma Rousseff
For the first time, the private sector workers were hit in 2015 under the Dilma Rousseff government, with the rule known as 85/95. The standard grants full retirement to workers who, summing the contribution time and age, achieve a score equal to or greater than 85 points (for women) and 95 points (for men). The sum is progressive and currently stands at 86/96 points. Dilma also implemented Funpresp, a federal servant's supplementary social security fund, in 2013. Those who started their careers after Funpresp have their retirement limited to the INSS ceiling (R$5,839.45), with the option to contribute to the complementary fund.
Michel Temer
With the worsening of public accounts and the widening Social Security deficit, the Michel Temer government presented a broad reform proposal in December 2016. The articulation, however, sank in the face of complaints against the now former president.
Jair Bolsonaro's proposal
After winning the elections with reformist proposals, and a liberal, pro-market vision, Jair Bolsonaro had a great responsibility to approve the reform, knowing that if it failed, the country's pension system would collapse by the year 2021–2022, reaching an uncontrollable deficit. The government's economic team, led by Minister of Economy Paulo Guedes, predicted that without the reform, Brazil would have no scope for investment in all areas of government.