Brazil Pension Reform Passes First Hurdle in Congress

Brazil Pension Reform Passes First Hurdle in Congress

Brazil’s lower house of Congress has voted by a large majority to overhaul the country’s generous pension system.

The vote, with 379 in favour and 131 against, is seen as a very important victory for President Jair Bolsonaro.

His government says the reforms are critical to boosting the growth of South America’s biggest economy.

But the controversial bill requires a second vote in the lower house before moving to the Senate where it faces weeks – or months – of more debate.

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The next vote is due to take place before Congress breaks for recess next week.

Proposed reforms include raising the retirement age and increasing workers’ contributions. Trade unions and opposition politicians argue that such moves would penalise the poorest, forcing them to work longer.

As lawmakers voted, demonstrations led by trade unions took place across Brazil. In Sao Paulo protesters closed down one of the city’s main avenues.

President Bolsonaro took to Twitter after the vote, congratulating lower house Speaker Rodrigo Maia.

“Brazil is ever closer to getting on the path to jobs and prosperity,” he said.

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The government’s plan includes raising the minimum retirement age to 65 for men and 62 for women.

Many Brazilians currently retire in their mid-50s on their full final salary.

They are currently required to have contributed to the pension system for 35 years (men) or 30 years (women).

The new proposal would delay a full payout of pensions until 40 years of contributions had been paid in, but partial pensions could be accessed after 15 to 20 years.

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The government estimates the plan would result in savings of $237bn (£188bn) over the next decade, and would be phased in over 12 to 14 years.

Wednesday’s vote approved only the basic text of the bill. The lower house is due to begin voting on any amendments on Thursday and the bill must then clear a second vote to reach the Senate.

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