Reforma de Previdencia - finalmente!
After nearly a year of protests and strikes, including an invasion of the floor of the congress and an extraordinary week's work stoppage by the country's federal magistrates in August, and despite partisan grandstanding up to the last minute, the Brazilian Senate finally approved yesterday the first reading of the proposed constitutional amendment setting out the basis of pension reform for Brazil's 800,000 civil servants. The reforms, one of Lula's key objectives for his first year in office, will put a gradual end to the slushy and expensive pension system that saw many retiring as early as 50 on large full final-salary, inflation-indexed pensions (aposentadoria integral).
The new system requires more years of service, including years of public service. Men will have to work to 60 years of age, including 35 years of employment, at least 20 years in public service and five in their last job to receive a full pension. For women, the requirement is 55 years of age and 30 years of service. After 2006, each year lower than the requirements will cut the pension amount by 5%.
The reform also imposes income tax on recipients, a payroll tax of 11% on active workers, and reduces by 30% any pension amount over R$2400. It also caps the amounts to be received by any one person (at a generous equality to the top salary of a Supreme Court justice, R$17,170 monthly, although most will be governed by "sub-ceilings"), and limits full inflation-adjustment parity with active workers only to those already receiving their pensions.
The government relied on support from 13 opposition senators to carry the measures through and ensure the necessary constitutional amendment will take place. Only one PT (Workers Party) member voted against the measure, Heloisa Helena, who tearfully refused to sell out her principles and who takes the PT to task for an about-face from their years in opposition, allowing so many to continue to receive so much on the backs of those who receive much less. Despite her long-standing friendship with Lula, Helena is likely to find herself expelled from the PT for maintaining her convictions against the party discipline.