After all, what has changed with the pension reform?

What do I need to know about the changes brought about by Pension Reform?

The Social Security reform entered into force on November 13, 2019 through the publication of Constitutional Amendment No. 103/2019, bringing in its content, new rules to be applicable to insured persons of the General Social Security Regime (RGPS) and of the Union’s own Social Security Regime (RPPS).

The main changes brought by the aforementioned constitutional amendment concern the rules inherent to the minimum age for a citizen to qualify for retirement, as well as the minimum time of his contribution with the INSS to retire, transition rules for the citizen who was already in the quality of Social Security insured, new rules to be applicable in case of death pension, etc.

In this article, the main changes brought by the new Social Security will be addressed, as we highlight in the points below:

Main rules related to minimum age and time of contribution:

Retirement by Urban Age (private sector workers, municipalities without their own social security system, among others, which are under the General Social Security regime (RGPS)):

The new urban age retirement rules require:

For women: proof of at least 62 years of age and 15 years of contribution;

For men: proof of at least 65 years of age and 20 years of contribution, and

For men who are affiliated to the RGPS (General Social Security Regime) before the publication of Constitutional Amendment No. 103/19, the minimum contribution time will remain at 15 years.

Retirement by Rural age:

The new age pension rules for rural workers require:

Contribution time of at least 15 years for both men and women;

Minimum retirement age for women: 55 years, and

Minimum retirement age for men: 60 years.

Federal public servants:

To federal public servants who contribute to the Union’s own Social Security System (RPPS), the retirement benefit will be granted if the following requirements are met:

Minimum age of 62 for women and 65 for men, and

Proof of 25 years of contribution to social Security, 10 years of public service, as well as 5 years in the position in which retirement will take place.

Retirement for teachers:

The retirement by time of contribution of the teacher requires proof by the Professional of 25 years of contribution for both men and women;

For women the minimum age will be 57 years;

For men the minimum age shall be 60 years, and

This rule will be applied to teachers who prove, exclusively, time of effective exercise in teaching functions in early childhood education, elementary school or high school.

Retirement for police officers:

Men and women will be able to retire at the age of 55 provided that they have contributed at least 30 years to social security, as well as have exercised their function in 25 years, and

The rule for the retirement of military police officers will also apply to the positions of penitentiary agent, socio-educational agent, Legislative Police, federal Police, Federal Road Police, federal Railway Police and civil police of the Federal District.

Calculation of pension benefit:

The calculation of the Pension Benefit will be as follows:

For workers under the General Social Security Regime (RGPS):

They will be able to retire with the 60% of the average of all pension contributions made since July 1994, provided that they have reached the minimum age and the minimum contribution time;

Two percentage points will be added on average to 60% of all pension contributions each year over contribution for this type of insured;

In order for them to live up to retirement in the amount of 100% of the average contributions, women must contribute for 35 years and men for 40 years;

The amount of pensions may not be less than a minimum wage or exceed the RGPS ceiling, currently corresponding to R$ 6,101. 06 (six thousand,one hundred and one reais and six cents), and

For women who contribute for more than 35 years and for men who contribute for more than 40 years with social Security, the percentage of the benefit received may exceed 100%, respecting the benefit ceiling established by the INSS.

For federal public servants:

Servers who entered the career from January 1, 2004: the calculation will follow the general rule of the new Social Security: average of 60% of all contributions plus two percentage points for each year of contribution that exceeds 20 years.

Servants who joined the public service until December 31, 2003: retirement amount will be that of the last salary, provided that the requirements of the transition rules mentioned below are met.

Rates

With the pension reform, the rates began to be progressive, as we observe below:

With the advent of the new Social Security, the rates began to focus on each remuneration range, in a similar way to the calculation of Income Tax.

Transitional rules

The pension reform brought with it transition rules for insured persons who were already in the labor market and contributed to social security, being guaranteed the choice of the most advantageous form of retirement.

The transition rules are differentiated depending on the contribution regime of the insured, as noted below:

For this scheme the transitional rules consist of:

Transition by points system (sum of contribution time with age)

Women: they will be able to retire from 86 points, with the minimum contribution time equivalent to 30 years;

Men: they will be able to retire from 96 points, with the minimum contribution time equivalent to 35 years;

Each year one more point will be required, reaching 105 points for men in 2028 and 100 points for women in 2033;

Teachers (both men and women) of basic education who prove the exercise of the teaching function in early childhood education and in elementary and Secondary Education will have a reduction of five points;

For teachers: they can apply for retirement from the sum of 81 points, as long as they have a minimum of 25 years of contribution;

For teachers: they can apply for retirement from the sum 91 points as long as they have at least 30 years of contribution, and

The aforementioned points will go up to 92 points, for female teachers, and up to 100 points, for teachers.

Transition by time of contribution and minimum age

Women: they will be able to retire at age 56, provided they have contributed at least 30 years, in 2019.;

Men: the minimum age required will be 61 years, with at least 35 years of contribution;

The minimum age required for both men and women will rise by six months each year, until it reaches 62 years of age for women in 2031 and 65 years of age for men in 2027;

Teachers of basic education who prove, exclusively, the exercise of the function of teaching in early childhood education and in elementary and secondary education: they will be entitled to a reduction of five years in the age and time of contribution.

Transition with pension factor-toll of 50%

Women with more than 28 years of contribution and men with more than 33 years of contribution will be able to opt for retirement without minimum age, provided that they comply with a 50% toll on the minimum time left to retire (30 years for women and 35 years for men). Example: a woman with 29 years of contribution will be able to retire without minimum age, as long as she contributes for another year and a half (one year corresponding to the period that was originally missing to retire and half a year, corresponding to the additional toll of 50%), and

The amount of the benefit will be calculated taking into account the average of all contributions since July 1994, on it applying the pension factor.

Transition with minimum age and toll of 100%

This rule establishes a minimum age and a toll of 100% of the time remaining to reach the required minimum contribution (30 years for women and 35 years for men).

For women, the minimum age will be 57 years;

For men, the minimum age will be 60 years.

Example: a woman of 57 years of age and 28 years of contribution will have to work four more years (two years left to reach the minimum contribution time, added to two years of toll), to claim the benefit;

The retirement amount will be 100% of the average of all contribution wages since July 1994 to workers linked to the RGPS;

Teachers of basic education who prove, exclusively, the exercise of the teaching function in early childhood education and in elementary and secondary education: there will be a reduction of five years in the age and time of contribution in the following proportion:

For women: 52 years of age and 25 years of contribution;

For men: 55 years of age and 30 years of contribution.

Transition-retirement by age (RGPS)

For men: minimum age of 65 years, with the contribution time of at least 15 years;

For women: in 2019, the minimum age began at 60 years, and should rise six months each year, in order to reach 62 years in 2023. The required contribution Time is a minimum of 15 years, and

The benefit amount will consist of an average of 60% of all contributions recorded since July 1994, plus two percentage points for each contribution year exceeding 15 years for women and 20 years for men;

RPPs of the Union-federal servers:

Transition by points system and minimum age

It will require 86 points for women and 96 points for men (in 2019), provided that the minimum age requirement below is observed:

ara women: 56 years in 2019, moving to 57 years in 2022.

For men: 61 years in 2019, moving to 62 years in 2022.

One more point will be required for each year, reaching 105 points for men in 2028 and 100 points for women in 2033.

The contribution period for the servants will be 30 years, and they must have at least 20 years of Public Service and 5 years in the position in which they will retire.

The contribution time for the servants will be 35 nos, and must have at least 20 years of Public Service and 5 years in the position in which retirement will take place.

Women who have reached the age of 62 will be able to retire with the full amount of their last active salary as long as they entered the public career until December 31, 2003;

Men who are 65 years old will be able to retire with the full amount of their last active salary as long as they entered the public career until December 31, 2003;

For civil servants (both men and women) who joined their positions from the year 2004, the calculation will follow the general rule of the new Social Security: average of 60% of all contributions plus two percentage points for each year of contribution that exceeds 20 years.

Basic education teachers: they will live up to the five-year reduction in the age and time of contribution, and the following scores must be observed:

For teachers: scoring starts at 81 points up to the 92-point limit.

For teacher: score will start at 91 points up to the limit of 100 points.

It must be proven by teachers, exclusively, time of effective exercise of teaching functions in early childhood education or in primary and Secondary Education.

Transition with minimum age and toll of 100%

Establishes a minimum age and a toll of 100% of the time left to reach the minimum contribution time:

For women: minimum contribution time equivalent to 30 years, with a minimum age of 57 years, being necessary to prove 20 years in the public service and 5 years in the position in which the retirement will take place.

For men: minimum contribution time equivalent to 35 years, with a minimum age of 60 years, being necessary to prove 20 years in the public service and 5 years in the position in which the retirement will take place.

The benefit will be equivalent to the last remuneration, for servants (both men and women) who have entered the career until December 31, 2003

For civil servants (both men and women) who entered the career from 2004, the benefit will be equivalent to 100% of the average of all salaries since July 1994. and

There will be a reduction of five years in the age and time of contribution of basic education teachers who exclusively prove, exercise of the teaching function in early childhood education or in elementary and Secondary Education.

Death pension

With the pension reform, there were inherent changes to the rules for those who will receive the death pension benefit. The payment consists of 50% of the deceased insured’s retirement amount plus 10% for each dependent he leaves, in the following proportion.

• 1 dependent: 60% of the deceased’s retirement

• 2 dependents: 70% of the deceased’s retirement

• 3 dependents: 80% of the deceased’s retirement

• 4 dependents: 90% of the deceased’s retirement

• 5 or more dependents: 100% of the deceased’s retirement

In the event that there are dependents who are invalid or have a serious disability, the payment of the death pension will be in the amount of 100% of the retirement amount of the deceased who contributed to the General Social Security Regime (RGPS), without exceeding the benefit payment ceiling.

In the case of death pension of Public Servants of the Union, of the amount that exceeds the ceiling will be paid 50% of retirement, plus 10% per dependent.

Finally, they will be entitled to the full pension (amount corresponding to the remuneration of the position), spouses or companions of police officers and correctional officers who die from aggression suffered as a result of work

Benefit limit and accrual

In cases where the law allows accumulation of benefit, 100% of the benefit of the highest value to which the person is entitled will be paid, plus a percentage of the sum of the others. The percentage will vary according to the benefit amount, as noted below.

• 100% of the amount up to a minimum wage;

• 60% of the amount that is between one and two minimum wages;

• 40% of what is between two and three salaries;

• 20% between three and four minimum wages; and

• 10% of what exceeds four minimum wages.

Conclusion

This article aimed to highlight the main changes brought by the Social Security reform, through explanations about new rules inherent to pensions, benefits and rules related to the death pension, both for the insured of the General Social Security Regime (RGPS) and for the insured of the regime for the Own Social Security Regime (RPPS).

To learn more, access in full the Constitutional Amendment No. 103/2019 available at: http://www.planalto.gov.br/ccivil_03/constituicao/emendas/emc/emc103.htm.

Geovana Carolina Silva de Andrade
Lawyer at TM Associados. Specialist in labor law and process by Faculdade Damásio De Jesus.