Jonah Patel
On October 22, 2019, Brazil's Senate approved a landmark pension reform bill in a 60-19 vote, with one abstention. The bill, which was first introduced by President Jair Bolsonaro in February 2020, underwent rigorous debate and multiple amendments before receiving final approval. The reform is a significant step towards addressing Brazil's budget deficit, which has been largely attributed to the national pension system, accounting for approximately 44% of the federal government's total annual budget. While the approved bill represents a victory for Bolsonaro and Economy Minister Paulo Guedes, it remains to be seen whether it will effectively boost economic growth and serve as a launchpad for the Brazilian economy.
| Characteristics | Values |
|---|---|
| Date of approval | 23 October 2019 |
| Voting result | 60-19 |
| Previous attempts | Multiple |
| First attempt | 1995 |
| Main proposal | Minimum retirement age of 55 years for women and 60 years for men |
| Main proposal result | Rejected |
| Final proposal | Minimum retirement ages of 48 years for women and 53 years for men for federal servants |
| Final proposal result | Passed |
| Aims | To decrease the country's budget deficit, boost confidence, investment and economic growth |
| Savings | Estimated at BRL 800 billion over the next decade |
| People impacted | 72 million individuals |
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What You'll Learn
- The Brazilian Senate approved the pension reform bill in 2019
- The bill amends the country's 1988 Constitution
- The reform is expected to save the government 800-900 billion reais over a decade
- The bill faced strong opposition from labor leaders
- The bill was first proposed by President Jair Bolsonaro in February 2019
The Brazilian Senate approved the pension reform bill in 2019
Brazil's Senate approved a landmark pension reform bill in 2019, in what was described as the "greatest pension reform in history". The bill was passed in a first-round vote on October 1, 2019, with 56 votes in favour, 19 opposed, and one abstention. The Senate's Committee on the Constitution and Justice (CCJ) had approved the bill earlier that day.
The bill aimed to save the public purse just over 900 billion reais over the next decade, with a focus on unpopular measures such as raising the minimum retirement age and increasing workers' pension contributions. The minimum retirement age was set at 55 years for women and 60 years for men. The bill also included provisions for workers at different risk levels, with varying sums of pension contributions and years of exposure to harmful agents required for retirement.
The pension reform was approved in a second round of voting in the lower House of Congress, with 370 votes in favour and 124 against. The Senate vote was the final step in a constitutional amendment process required to modify pension laws, as the right to retirement benefits is enshrined in the country's 1988 Constitution.
The approval of the pension reform bill was a significant win for President Jair Bolsonaro and Economy Minister Paulo Guedes, who had urged senators to approve the legislation, stating that "reform is necessary".
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The bill amends the country's 1988 Constitution
Brazil's Senate approved a landmark pension reform bill in 2019. The bill was approved by a margin of 60-19, with 56 in favour, 19 opposed, and one abstention. The pension reform was approved in two rounds of voting in the lower House of Congress, with 370 votes in favour and 124 votes against. The bill amends the country's 1988 Constitution, which guarantees the right to retirement benefits. As a result, Congress must hold numerous committee and chamber votes on the measure, and ultimately three-fifths of Congress (308 votes in the House and 49 votes in the Senate) must vote in favour of the reform.
The bill's main point was to set a minimum retirement age of 55 years for women and 60 for men. It also proposed to withdraw from the Constitution the possibility of applying the disciplinary penalty of compulsory retirement. Previously not included in retirement plans, informal workers will be specified among low-income workers and will have a lower contribution rate to access Social Security benefits. For workers at higher risk, the sum should be 66 points, plus 15 years of exposure. For those with medium risk, 76 points and 20 years of exposure. For low risk, 86 points and 25 years of exposure to harmful agents.
The bill also included a controversial proposal to limit salary bonuses to workers with income up to two minimum wages (R$1,996). This proposal was overturned through a highlight (suggestion of amendment). The text of the bill defines that the beneficiaries of family allowance and seclusion allowance should have an income of up to R$1,364.43. The proposal only targets certain federal officers, while current rules are maintained for military police officers, civil police officers, and firefighters, with requirements determined by each state.
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The reform is expected to save the government 800-900 billion reais over a decade
Brazil's Senate approved a landmark pension reform bill in October 2019. The reform is expected to save the government 800-900 billion reais over a decade. The bill was passed in two rounds of voting, with the first round passing with 56 votes in favour, 19 against, and one abstention. The second round of voting in the upper house was completed by October 22, with 60 votes in favour and 19 against.
The pension reform bill was first introduced by President Jair Bolsonaro, who stated that reform was necessary to prevent Brazil from going bankrupt within two years. The bill aimed to save the public purse by raising the minimum retirement age and increasing workers' pension contributions. This was expected to reduce the country's budget deficit, which was largely caused by national pension expenditures, amounting to approximately 44% of the federal government's total annual budget.
The bill faced opposition, with some senators expressing dissatisfaction over "pending issues" and an amendment that would have reduced year-end bonus salary payments to low-paid workers was rejected, diluting the bill's overall fiscal impact by 76 billion reais. However, the final reform is still expected to save the government a significant amount over the next decade.
The pension reform was a significant change for Brazil, as the right to retirement benefits is enshrined in the country's 1988 Constitution, and any amendment requires an absolute majority in both houses of Congress. The previous attempts at pension reform had faced strong opposition and were largely unpopular. This reform was labelled as the "greatest reform in history" as it directly affected 72 million individuals.
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The bill faced strong opposition from labor leaders
Pension reform in Brazil has been a topic of discussion for over 30 years, with the country debating the issue every ten years. However, it was not until 2019 that the reform was approved, due to strong opposition from labor leaders and the Brazilian population.
Brazil's 1988 Constitution states that the right to retirement benefits is guaranteed. As a result, any changes to the pension system require a constitutional amendment, which must be approved by an absolute majority in both houses of Congress. This means that 308 votes in the Chamber of Deputies and 49 votes in the Senate are needed to pass any reforms.
Despite the opposition, the bill was approved in the lower House of Congress by 370 votes to 124 and in the Senate by 60 votes to 19. The final step in the constitutional amendment process was completed on October 22, 2019, with the approval of the Senate, and the reform was labelled as the "greatest reform in history" by Senator Davi Alcolumbre, President of the National Congress.
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The bill was first proposed by President Jair Bolsonaro in February 2019
Brazil's President Jair Bolsonaro first proposed the pension reform bill to Congress on 20 February 2019. The bill was approved by the Chamber of Deputies on 11 July 2019, with 379 votes in favour and 131 against. The bill then passed to the Senate, where it was approved in a first-round vote on 2 October 2019, with 56 in favour, 19 opposed, and one abstention. The pension reform was then approved in a second round of voting in the lower House of Congress, with 370 votes in favour and 124 against.
The bill aimed to reform Brazil's pension system and address the worsening public accounts and widening social security deficit. The main points of the proposal included increasing the minimum years of service required to retire, changing the age limit for transfer to the reserve, and reducing the number of dependents allowed. It also proposed setting a minimum retirement age of 60 years for men and 55 years for women.
The pension reform bill was seen as a victory for Bolsonaro and his Minister of Economy, Paulo Guedes, who argued that without reform, Brazil would have no scope for investment in all areas of government. The government predicted savings of around R$1 trillion ($237 billion) over the next decade as a result of the bill.
The bill underwent vigorous discussion and multiple amendments before being signed into law by Bolsonaro on 23 October 2019, marking the first significant political victory for his government.
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Frequently asked questions
Yes, on October 22, 2019, the Brazilian Senate approved a constitutional amendment on pension reform.
The vote was 60-19, with 56 in favor, 19 opposed, and one abstention.
The reform aimed to decrease Brazil's budget deficit, which was largely caused by the national pension system, accounting for approximately 44% of the federal government's total annual budget.
