Reducing women's pension age may increase men's, says Brazil's minister

Finance Minister Henrique Meirelles said on Wednesday (Mar. 8) that by reducing women's pension age, the social security reform proposed by the Brazilian government could be ineffective or men could have to work longer.

According to the government's bill sent to Congress, men and women will retire at 65. Currently, no minimum age has been set for the worker to retire. Under the current rules, a person can prepare for retirement after 30 years of contribution for women and 35 years for men.

According to the minister, if the women's pension age was reduced to 60 years, men would have to work until 71 to compensate it. Meirelles said that when lawmakers hear this explanation, they get a shock. "They only think about the benefit, not about the cost of it." Meirelles added that more than half of the Brazilian population is made up of women.

The minister also argued that the Brazilian Constitution of 1988 already establishes men's retirement age at 65 or 35 years of contribution. "That was in 1988, when the Brazilian average life was lower. Therefore, there is no reason to change it or try to reduce it because the Brazilian life expectancy increased and the life time after retirement is also gradually increasing. We have been discussing over this situation. How can we ensure that Brazilians do indeed receive their retirement pension in peace?," he said.

The minister also said that if they established a transition rule applicable to the younger ones, who are currently around 40 years old, this would make the older people work longer. According to the government's bill, the transition rule will be applicable for those close to the retirement age. Men aged 50 or older and women aged 45 or older will be allowed to retire with special rules.

"The problem with the progressive transition rule is that it cannot be only adjusted on the down side. It has to be from the bottom to the top. If we begin with people aged 40, we have to include people older than 50 years old. Those who are very close to the retirement age would be penalized to benefit the younger ones," he said.

Meirelles said they cannot "do magic with the numbers." "The important thing is that all Brazilians can be certain that they will receive their retirement pension, that interest rates continue to fall, and that inflation will continue to fall. And for that to happen, we have to control public spending. It's very easy to spend the government's money. Some countries and Brazilian states have done that and are suffering disastrous consequences. The bill has to be paid sooner or later," the minister added.

Translated by Amarílis Anchieta