For the better part of 2017, the Brazilian legislature and executive have been playing games on each other regarding the proposed pension reforms bill. On several occasions, the proposed bill was brought to the floor of the Congress but it failed to garner the required votes to pass it into law. The proposed pension bill has undergone several changes to remove sections that don’t seem to go well with the public. The legislators feared that if the proposed pension reform bill was passed without changes, it would rub the public the wrong way and hence interfere with their chances of their re-election later this year. But according to experts, if the cat and mouse game between the two arms of the government won’t stop, then the Brazilians could end up suffering.
Many countries across the world experience budget deficits. However, the Brazilian case is quite unique for various reasons. Firstly, the Brazilian population is among the fastest growing populations in the world. Secondly, the current pension scheme in the country gives exceedingly generous pensions to the retirees. Thirdly, the current pension scheme has lowered the minimum retirement age for the working population to levels that cannot be supported by a middle-income economy according to estadao.com.br.
For instance, according to the current Brazilian pension scheme, the average retirement age for the working population stands at 55 years. It means that a woman who begins contributing to the pension scheme at 15 years can retire at 45 years and be eligible to receive their pension.
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The current pension scheme in Brazil is largely responsible for the huge deficits that the government has been experiencing while budgeting. Experts argue that the current Brazilian pension scheme consumes as much as 50 percent of the federal expenditures. The figures have been rising and experts estimate that if the reforms are not done immediately, the figures will continue rising by at least three percent each year.
Luiz Carlos Trabuco gives his opinion
Luiz Carlos Trabuco, one of the renowned bankers in Brazil recently weighed into the matter that has been the subject of debate for several years. According to Luiz Carlos Trabuco, it is vital to conduct the pension reforms immediately. In fact, Luiz Carlos Trabuco argues that it would be better if the Congress passed the proposed bill into law before the country enters into elections later this year.
While addressing the journalists, Luiz Carlos Trabuco noted that passing the proposed pension reforms bill would help the Brazilian government to put a ceiling to the federal expenditure. He continued to note that if the Brazilian government doesn’t do anything, it could end up hurting the economy.
Luiz Carlos Cappi has been serving in the Brazilian banking sector for close to five decades. He started out as an intern at the Banco Bradesco and later on rose through the ranks to become the bank’s chairman. Bradesco bank has been in existence since the early 1950s and it is now the largest private bank in Brazil. As a result, Bradesco bank plays a vital role in the Brazilian economy.