Good morning. The government’s pension reform begins to take shape. President Bolsonaro’s health gets worse. Geopolitics in the way of agricultural exports.
The government’s pension reform begins to take shape
Markets experienced a good day on Monday after a draft of the government’s pension reform system was published by the press. The document brings a set of proposals that are much harsher than the reform proposed by former President Michel Temer. President Jair Bolsonaro (currently in the hospital, read below) should present the reform bill to congressional leaders by the end of the month. Here are the main proposals in the draft:
- Bumping the minimum retirement age every four years, until reaching 65 for both men and women. The minimum time of contribution to the pension system would be 20 years (25 for civil servants), but workers would only receive their full pensions after 40 years.
- The minimum wage will no longer be the minimum pension. Low-income people over 55 would get BRL 500/month — and BRL 750 for those over 65. In the 1990s, giving retirees at least the minimum wage helped prevent a serious hunger crisis in the Northeast, according to the Institute of Applied Economics (Ipea).
- The creation of a capitalization system — contributions go to individual accounts which are then invested, the returns are then