Publication: Brazil : Critical Issues in Social Security
Date
2001-05
ISSN
Published
2001-05
Author(s)
World Bank
Abstract
Social security is the single most
important fiscal issue facing the Brazilian government
today. This report summarizes the state, and potential
policy implications, of the Brazilian Social security
system. It also discusses policy recommendations for: social
security and pensions, the national social security system,
government pensions and funds, and the complementary pension
systems. An overview of the social security challenge
reviews the system components, revealing unsustainable
fiscal imbalances and administrative weaknesses in both the
unreformed General Regime for Social Security (RGPS), and
the Pension Regime for Government Workers (RJU), with large
tax-related distortions, and labor market inefficiency. Thus
the goals of Brazil's reforms are to reduce fiscal
deficits, lower actuarial imbalances, increase equity and
redistribution, reduce collateral inefficiencies, and
facilitate growth of funded pensions. The study implies
there is no recourse for the country, but to lower the high,
uniform replacement rates (experience suggests that rates
higher than 40-70 percent, cannot be sustained). The key to
effective reform of social security is widening the debate
to include potential winners from these changes,
particularly the private sector, the young, and the poor.
Policy recommendations suggest that the adverse equity
effects of RGPS reforms should be widely publicized to
generate political support for deeper RJU reform.
Citation
“World Bank. 2001. Brazil : Critical Issues in Social Security. A World Bank country study;. © Washington, DC. http://openknowledge.worldbank.org/entities/publication/fe28f38f-9c73-57ac-af46-7a45751a86a5 License: CC BY 3.0 IGO.”