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Rolim defends capitalization, but underscores that government proposal does not create a new system

New Social Security

Secretary of Social Security, Leonardo Rolim, participated in a public hearing on the issue on Wednesday (29) in the Chamber of Deputies

The Social Security Secretary of the Ministry of Economy, Leonardo Rolim, said on Wednesday (29) that the proposal to create the capitalization system, within the New Pension Plan, guarantees the principles of taxation and solidarity provided for in the Federal Constitution, the guarantee of the floor of a minimum salary for retirement. The statement was made at the 12th public hearing of the Special Committee on the Proposal for Amendment to the Constitution (PEC) 06/2019, which deals with New Social Security, which had as its central theme the capitalization regime and actuarial valuation. Rolim emphasized, however, that PEC 06/2019 is not creating a new system. "The proposal is authorizing a supplementary law, in the future, after the approval of the PEC, to create the capitalization system, with defined rules and studies for the implementation of such an important system for Brazil. It would be irresponsible, in the context of the discussion of a New Pension Plan, with parametric and structural changes in the Social Security System, if we were already discussing, at the same moment, the implementation of a capitalization system, "he said.

According to Rolim, the opening to capitalization brings important advantages for both the citizen and the country. "It is a fairer and more equitable system, with greater profitability potential, more transparent and that will protect the worker with unscheduled benefits. For the country, we will have a greater internal savings and a sustainable social security system, which we do not have today, and we will be able to grow in the coming years in a much more sustainable way than in recent years, "he said.

New Private Pension provides for the option of capitalization only for those who are still entering the labor market after the new rules are approved, not for workers already in it. "And even those who are going to enter can choose to stay in the current system of simple allocation or go to the new hybrid system, with a mandatory capitalization part," Rolim said. He also stressed that all pension rights of the current system will be guaranteed in the new system.

Another premise of the government proposal is the free choice, by the employee, of the entity or modality of reserve management, with portability. It is also foreseen that the management of reserves will be carried out by public and private pension entities, authorized by a regulatory body, ensuring wide transparency. "The proposed model is a broad competition, including non-profit entities and public participation, such as the National Institute of Health and Safety and Social Security (INSS)," said the secretary.

Experience - Leonardo Rolim also highlighted that Brazil already has real examples of the implementation of the mandatory capitalization regime. "The municipality of Barueri [SP] created in 2006 a system fully capitalized in defined benefits, with a server rate of 11% and employer of 19%, with an actuarial surplus of R $ 221 thousand and capitalized R $ 1.9 billion. Another example comes from the state of Espírito Santo, where a third of the servers are already in the capitalized surplus system at R $ 920 million and with R $ 4 billion capitalized. Most of the resources, about 90%, are applied in Brazil, "noted the secretary.

Several countries with better pension performance, such as the Netherlands, Denmark, Norway and Finland, have a hybrid system model, with a mandatory capitalization layer and an optional one. "In general terms, our model is a tiered scheme, with the non-contributory system as the first pillar and then the notional allocation and financial capitalization, together with the solidarity fund to guarantee the minimum wage, preserving the principle of solidarity of the system. We also maintain the logic of complementary pension, "said Leonardo Rolim.