Reforma previdenciária

Demographic transition and the regulatory shortcomings of Brazil’s social security

Brazil's social security system is not sustainable in its current form

In two decades Brazil has built a comprehensive welfare state, but it is very costly and ill prepared to face the ageing of the Brazilian population - by 2050 Brazilians 65 or older will represent 23% of total population, while the workforce will be shrinking.

Brazil’s social security and social assistance provisions are too expensive and becoming more so relative to the country’s age profile and per capita GDP. This paper concludes that Brazil’s social provisions must undergo deepregulatory changes if they are to meet the challenge posed by thecountry’s shifting demography, as population ageing is the single mostimportant factor affecting social security in Brazil.

The authors argue that the following factors need to be addressed:

• social security pensions are currently indexed to the minimum wage
• there is low eligibility age
• pensions are high relative to past contributions
• there is a short minimum contribution period
• there is the possibility of accumulating different benefits
• some social security benefits are dispensed as social assistance benefits
• MAIS