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Brazil’s Military Now Part of Pension Reform

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Not even Brazil’s military is safe from President Jair Bolsonaro’s proposed pension reform.

A new overhaul bill was submitted Wednesday to the nation’s Congress, which seeks to save nearly $2.8 billion for the nation’s social security system over the next decade.

The proposal wants to increase military payroll contributions to 10.5%, from 7.5% while also raising the number of service years needed to retire, to 35 from 30. The last part coincides with Bolsonaro’s plans for the rest of the nation’s benefits. Contributions would gradually increase from 2020 to 2022.

“It was a task for them,” said Economy Minister Paulo Guedes, who said negotiations with the military were “strictly based on their contribution to our social security system.”

The funny thing about the military changes is that they also hit the pensions of Brazil’s police and firefighters. Despite being a separate government-managed group, the two lines of duty are lumped into the same pension program as that nation’s armed forces.

If approved, net savings will come from 97.3 billion reais ($25.8 billion) in pensions, and another 86.9 billion ($23.05 billion) in additional public spending due to salary and career changes, the Economy Ministry said.

Guedes called the move “a surplus” for the military, adding that the armed forces “understood the importance of participating in this contribution.”

Brazil’s last several presidents have tried without success to reform the pension system to reverse financial turmoil. Bolsonaro, a former army captain, wants to save more than 1 trillion reais in a decade to turn things around for the troubled country.

According to central bank data, Brazil’s deficit is 77% of gross domestic product as of February.

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