Brasília- DF. 15-01-2019- Presidente Bolsonaro assina decreto liberando a compra de armas para cidadão de bem. Foto Lula Marques

The goal is to transform pensions into a “minimum income” even smaller than the minimum wage

By PSTU-Brazil

On the evening of Monday, February 4th, the Estadão newspaper revealed some points of the Pension Reform prepared by the government, which it will send to Congress this month through a Proposed Constitutional Amendment (PEC, in Portuguese).

Among them are a minimum of 65 years of age (for both men and women), 40 years of contribution  for the right to pensions equal to your wage, pensions below the minimum wage for the BPC-LOAS (see below) and the controversial capitalization of Social Security, a mechanism responsible for a social tragedy in Chile, where it was first attempted.

Amidst the commotion caused by the rupture of Vale’s dam in Brumadinho (state of Minas Gerais) and the corruption charges that pile up even though the government has just started, Bolsonaro plans a Pension Reform. His goal is the complete destruction of the public pension system, its privatization for private funds, and, for many workers, its replacement by a benefit which is smaller that the minimum wage.

40 years of contribution

According to the newspaper, the PEC, aside from imposing a minimum age of 65 years for retirement, establishes a contribution time which goes from 25 to 40 years. This scale starts with the right to 60% of your salary if you retire after 25 years, increasing two points per extra year of contribution until reaching 100% with 40 years.

The current systems allows retirement by time of contribution (35 years for men and 30 for women) or by age (65 for men and 60 for women, as long as you have contributed for 15 years). The Reform will end retirements solely by contribution time.

For public employees, who already need a minimum age to retire (60 years for men and 55 for women), the contribution time will also be from 25 to 40 years in order to have integral pensions.

Untying from the minimum wage

Another measure included in the Reform PEC is the untying of the minimum wage from the “Continued Provision Benefit” of the Organic Law of Social Assistance, the BPC-LOAS. Today the benefit guarantees a pension equal to a minimum wage to low income elders with more than 65 years, as well as disabled people.

According to Estadão, the PEC will untie the benefit and the minimum wage, guaranteeing only R$ 1000 (about $250 dollars) for disabled people with proven low income, and a sort of minimum income for poor workers, which begins at R$ 500 when 55 years old, R$ 750 above 65 years (with a “bonus” of R$ 150 for elders with more than 70 years of age and 10 years of contribution). By the end of 2018, 4.5 million people survived through the BPC.

Capitalization system

A measure of the Pensions Reform is practically a point of honor for Paulo Guedes, Minister of Economy. In it, the worker contributes compulsorily to an individual pension fund, which is managed by a financial institution, and the value of his retirement pension is conditioned to the profitability of this fund. Employers no longer need to contribute for Social Security.

In Chile, where this was imposed by Pinochet’s dictatorship, it is responsible for a social catastrophe, where 80% of the retirees receive less than a minimum wage.

Propaganda

In a message sent to Congress, Bolsonaro defended a Pension Reform that would be “modern” and “fraternal”. Just like Michel Temer, the government prepares a massive media campaign to defend its reform. It will likely reuse the lies of the previous government: that the reform will put an end to “privileges” when, in reality, it protects the current privileged ones like lawmakers, the commanders of the armed forces and the upper echelons of the Judicial system, and benefits the real privileged: the bankers.

The Pension Reform would mean the end of the right to retirement for millions of workers. The minimum wage and increased contribution requirements simply purge the system from poorer, informal and precarious workers. For them only the “minimum income” of the BPC would remain, which would become a sort of “Bolsa Família” for poor workers and the disabled.

 

translated by Miki Sayoko