Senior citizens make up a hefty 14.3 percent of Brazil’s aging population, according to a study released this morning. Researchers from the Brazilian statistical institute (IGBE) have reported a 46 percent increase in the elderly population since 2005. Meanwhile, fertility rates plummeted to 1.7 per woman, far below the rate necessary to replace the population. Brazil’s elderly population will double within the next 24 years, further increasing dependence on its pension system.
Despite a looming crisis, politicians have set aside pension reform to focus on passing a federal spending cap. Pension reform remains extremely unpopular among Brazilians, who are used to comfortable retirement and unemployment plans. The cap on federal spending, however ominous for the public healthcare and education system, may present less evident consequences.
Critics of the current pension system warn that Brazil is cashing in too early on its working-age population. Indeed, Brazil spends up to 10 percent of its GDP on public pensions, an exaggerated amount compared to other countries. Especially considering Brazil’s population has only just begun to age.
What’s in the Pension Reform
The suggested pension reform calls for cutting benefits, raising the retirement age, and increasing the required number of years worked to receive benefits. In addition, the reform would put regulations in place to cut down on pension fraud. For example, it’s common practice among Brazilian public servants to collect multiple pensions within a single year, sometimes totaling over $100,000.
Current regulations are slack at best, with loopholes allowing the spouses and family members of public servants to continue collecting pensions indefinitely. Meanwhile, 22.2 percent of Brazilians receiving retirement benefits are still capable of working, up from 15.5 percent in 2005.
Brazil’s Elderly At Work
While public servants cash into government pensions, lower class Brazilians continue working well into their later years. According to today’s study, Brazil’s working senior citizens have only 5-6 years of education and occupy low qualification jobs. Many work under the table without the possibility of earning social benefits. Others have returned to the workforce because their pension doesn’t cover living costs.
According to the IGBE, 22 percent of Brazilians over 60 are in the workforce. Of those returning to the workforce in this last year of economic recession, 90 percent were 50 years of age or older.