See the rights of INSS retirees

The professional who requests retirement by the INSS (National Social Security Institute) has a series of benefits, which can start with the pre-retirement stability provided for in the union agreement.

Pre-retirement stability is not guaranteed by law, but is guaranteed to some categories through conventions or collective agreements between unions and companies.

To find out if he has the right to stability, the worker must consult the union of his class about the existence of this clause in conventions or collective agreements.

According to Joseane Zanardi, coordinator of the IBDP (Brazilian Institute of Social Security Law), even those who are not associated with the union are entitled to what is in the collective agreement, but attention must be paid to the rules established in each agreement.​

The collective bargaining agreement of the Sindicato dos Comerciários de São Paulo, for example, has a clause “Guarantee of employment for future retirees”.

The duration of tenure varies according to the length of time the trader has worked in the same company: 20 years or more allows for two years; ten years or more, one year; five years or more, six months.

“All the commerce workers covered by the convention, which we estimate are 500 thousand people in the city of São Paulo, are entitled in the event of dismissal situations close to retirement”, says Ricardo Patah, president of the union.

The obligation to keep the employee can be replaced by an indemnity corresponding to the wages of the period with the right to stability, for example. In case of termination of the company’s activities, dismissal for just cause or resignation, the agreement does not apply.

“In some cases, it has [o empregador] want to let go anyway. In this case, they decided in the administrative area to pay the full amounts. When presenting the extract [de informações previdenciárias]the company is obliged to pay stability or give the job again”, explains Patah.

According to experts, the employee must inform the company when he reaches the conditions of the pre-stability period and that he meets the requirements to retire on a certain date.

“There is questioning about the employee not notifying the company and, after being fired, filing a lawsuit asking for stability, but he did not meet the requirements set out in the agreement”, says the lawyer.

I asked for retirement. Do I need to inform the company?

“It is not in the law that you have to inform, but it is recommended”, says Zanardi.

Special retirement or public employment cases demand greater attention on the part of the worker.

“In the case of granting special retirement, the worker is prevented from providing services, in the same company or in another, in the activity or operations that subject him to risks and harmful agents, under penalty of cessation of payment of the benefit”, explains Gabriela da Cruz Garcia, lawyer specializing in labor law.

In the case of public employment, where there is no own pension scheme and contributions are made to the INSS, the 2019 pension reform defined that the contract is automatically terminated by retirement.

“So if she retires and doesn’t communicate to the public entity that she has retired, theoretically, it can even characterize fraud”, warns Zanardi. The professional can work elsewhere, but not in the job where he retired, she says.

João Badari, a social security lawyer and partner at ABL Advogados, recommends checking the specific rules of each public company to verify the existence of specific deadlines and rules for communicating retirement.

“What is happening is that each public company is editing its own rule through an ordinance, so in addition to dismissal, the worker can respond to a disciplinary process”, he explains.

Does the INSS inform the company?

Social Security is obliged to inform the company only in the case of retirement due to permanent disability (former disability retirement).

“This is because the person cannot exercise a professional activity after being retired due to permanent disability”, explains the INSS.​

What sums can the INSS retiree withdraw?

According to the INSS, after granting any retirement, the worker receives the letter granting the benefit and the certificate to withdraw the PIS (Social Integration Program) and the FGTS (Fundo de Garantia do Tempo de Serviço).

“This certificate allows the retiree to withdraw all amounts referring to these funds”, says the institute.

What are the rights of the INSS retiree who continues to work?

Monthly withdrawal from the Guarantee Fund

The monthly withdrawal of the FGTS can be made by the retired employee who continues to provide services for the same company in which he retired.

“On the other hand, if the retired worker is hired by another company after the granting of retirement, there is no provision authorizing the monthly withdrawal of the FGTS”, says Garcia. In such cases, the money deposited in the fund’s account can only be withdrawn when the employment contract is terminated.

Rescission funds remain

If the company dismisses the employee without just cause, he is entitled to all severance pay, like other workers, even if he is retired from the INSS:

• salary balance
• notice, worked or indemnified
• proportional and expired vacations, if applicable, with an addition of one third of the salary
• 13th proportional salary
• termination fine of 40% of the FGTS

The termination fine of 40% of the FGTS remains even if you have withdrawn the balance you had in the fund when you retired. The amount must be calculated on the total deposits made by the company during the entire period worked.

One difference is that, with the dismissal without just cause by the company, the retired employee will not be entitled to unemployment insurance: “The unemployment insurance benefit cannot be accumulated with retirement”, explains Garcia.

If the worker resigns, he is also entitled to severance pay:

• salary balance
• proportional and expired vacations, if applicable, with an addition of one third of the salary
• 13th proportional salary

In addition, you must comply with prior notice, under penalty of discount by the company.

Retired person who works contributes to Social Security

According to the INSS, the insured person who retires and continues working, in the same or another company, must continue to contribute to Social Security. “However, these contributions will not be used for benefit purposes, but for the cost of Social Security.”

“The Brazilian system is solidary. You don’t have your own pension account, you contribute to an account that belongs to society. So everyone who works supports everyone who is receiving”, explains Zanardi.

The Federal Supreme Court (STF) ruled that working retirees are not entitled to the so-called retirement exchange, to include contributions paid to Social Security after the benefit is granted.