General information
The pension system is structured around three large regimes: the General Social Security Regime, the Public Sector Social Security Regime and the private security regime, of a complementary nature.
a) The General Social Security Scheme, administered by the National Social Security Institute (INSS), is of a contributory nature and of compulsory affiliation. The minimum retirement age varies between rural and urban areas. In urban areas, age pensions are granted to men over 65 and women over 60 years of age. In rural areas, these are granted to men over 60 years of age and women over 55 years of age. In addition, retirement for contribution time is granted at 35 years of contribution in the case of men and at 30 years of contribution in the case of women.
b) The Pension Scheme for Public Servants, also administered by the public system, is of a contributory nature and covers workers in the public sector, whose affiliation is mandatory. Excluded from this group are employees of public companies, political agents, temporary servants and holders of positions of trust, who must compulsorily join the General Social Security Scheme.
Compulsory retirement is granted at age 70 for both men and women and retirement for contribution time at 35 years in the case of men and 30 years in the case of women. Public servants who joined the system as of 1998 are subject to the minimum retirement age of 60 for men and 55 for women.
c) The supplementary pension scheme, organized autonomously in relation to the General Scheme, is privately administered and membership in it is voluntary.
Regarding the financing of benefits, the fundamental difference between the General Scheme and the latter is that the latter functions as a capitalization system (either individual or collective) and the General Scheme as a pay-as-you-go system. Thus, the benefits granted by it constitute a complement to the benefits provided by the public system.
In terms of coverage
In Brazil, pension coverage, measured as the number of contributors to the General Social Security Scheme over the economically active population (EAP), has increased in recent years, reaching 37% of the EAP in 2007 (graph 1). Although pension coverage has increased, there is still a large proportion of the population to be reached, which represents a significant challenge.
To extend the coverage of social security to the population that is not yet protected, Brazil has carried out a significant number of measures, such as: promoting the inclusion of people with lower incomes to social security (by reducing the number of contribution rates for individual taxpayers), the establishment of incentives for the incorporation of domestic service into the pension system, consolidation of the provision in rural areas of the country, among others. Through these measures it is hoped to reach and provide social protection to a significant part of the population not yet covered.