The Brazilian private pension scheme is the oldest in Latin America. In contrast with other Latin American countries, Brazil has not replaced the basic public system by a mandatory private pension scheme, but has pursued reforms that develop complementary and voluntary private pension schemes, offering an alternative for medium and high income workers to preserve their life quality after retirement.

Retirement age is 65 for women and 60 for men. A state pension is available after 35 years’ contributions for men and 30 years for women. The full state retirement pension is 70% of average covered earnings, up to the contribution ceiling, plus 1% for each year of contributions up to a maximum of 100%. The minimum pension paid is the equivalent of the minimum wage. A proportionately reduced pension may be paid after age 48 with 25 to 29 years of contributions for women, and age 53 with 30 to 34 years of contributions for men. Survivors’ and disability pensions are also provided. All employees are covered for medical care. There are also generous social assistance benefits. Reforms to the state system are making private plans more important.

For state retirement and survivors’ pensions and medical care, employers pay 20% of earnings and employees pay from 8.0% to 11.0% of earnings up to BRR 3,038.99 a month. For private plans the contribution levels vary widely, typically between 1% and 5% of pay by both employer and employee. Employers are required to pay a contribution of 8.5% of monthly earnings into each employee’s account for severance pay (FGTS). Employer contributions to private pension plans are tax deductible up to 20% of payroll. Employee contributions to state and private plans are tax deductible up to 12% of income. Retirement pensions are taxed as income. Severance payments are tax free.

Applications for pension benefits can be made online or by telephone:

For further information on pensions in Brazil click here:

• http://www.previdenciasocial.gov.br (in Portuguese).

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