Brazil’s Bolsonaro to Tackle Pension Overhaul Piecemeal

Right-wing President-elect Jair Bolsonaro said on Tuesday he plans to tackle the overhaul of Brazil’s fiscally burdensome pension system with piecemeal reforms that can pass Congress, starting with an increase in the minimum age of retirement.

He said reforms should start with the public social security system and advance gradually to make sure they pass Congress.

“The idea is to start with the (minimum) age, attack the privileges and take it forward,” Bolsonaro said at a news conference, warning that the problem with the cost of the pension system was growing every year.

“We cannot allow Brazil to reach the situation that Greece reached to do something about it,” he said.

Brazil’s next president said he planned to start by raising the minimum age of retirement for everyone by two years, but keeping the gender age gap, building on a proposal made by incumbent President Michel Temer. He gave few details.

Currently, Brazilian men can retire after 35 years of contributions and women after 30 years. Men can also retire by age 65 and women at 60 as long as they have contributed for at least 15 years.

Generous pensions are a major cause of Brazil’s gaping budget deficit and growing public debt, an unsustainable situation that is becoming more acute as the population ages and more people retire.

Investors and credit rating agencies are watching Bolsonaro’s commitment to pension reform closely as it is key to reducing the deficit and restoring confidence in Latin America’s largest economy as it recovers slowly from a two-year recession.

The pension reform proposal by Temer’s outgoing government never gained enough traction in Congress.

Bolsonaro, who takes office on Jan. 1, began meetings with political parties on Tuesday to see how he can build support for his agenda that includes tax reform and the easing of gun laws.

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