The redistributive impacts of the Brazilian 2019 pension reform on individual pension indicators for Brazilian civil servants

Abstract

This article examines the redistributive effects of the 2019 reform on the benefits of Brazil's federal public service pension scheme for old-age and survivors' benefits. We developed an actuarial model to compare the Current Situation (which applies to those who entered public service from 2020 onward) with the three cohorts under the Old Situation (those who joined before 2004, those who joined between 2004 and 2012, and those who joined between 2013 and 2019). We calculated four pension indicators, breaking down the results by gender, as well as teaching and non-teaching staff. The reforms led to reductions in both replacement rates and required rates. Additionally, the internal rates of return decreased, while effective rates increased. Women and teachers were the most negatively affected by these changes. The composition of required rates between old-age and survivors' pensions has also shifted. Overall, the reforms diminished the redistributive characteristics and the adequacy while increasing their equity and progressivity.