Retirement from the transition will have a greater discount on the INSS

The INSS (National Social Security Institute) will change the discounts on pensions for workers who meet the 50% toll transition rule created by the Social Security reform.

The larger discounts will be applied after the Pension fund updates the pension factor table, an index that considers age, contribution time and expected survival.

The social security factor, which was once considered the villain of pensions due to contribution time, started to be applied in few situations since the Social Security reform began to take effect, on November 13, 2019.

One is the 50% toll transition, which does not require a minimum age. The factor is also used for workers who demonstrate the right acquired to previous rules of the reform.

This Thursday (25), the IBGE (Brazilian Institute of Geography and Statistics) released an update on the population’s life expectancy, with projected information based on 2010 Census data, which do not include the effect of the Covid pandemic. 19. According to IBGE, the mortality tables provide the indicators that would be expected if the country had not gone through the pandemic.

If Brazil had not experienced a mortality crisis in 2020, life expectancy at birth would have been 76.8 years for the population, an increase of 2 months and 26 days compared to the estimate for 2019 (76.6 years).

Newton Conde, a pension consultant from Conde Consultoria Actuarial, criticizes the lack of information on the deaths registered in the pandemic and believes that the IBGE could, for example, use data from the Pnad (National Survey by Sample of Households) to make this calculation.

In retirements that use the social security factor, the greater the life and survival expectancy (defined for each age), the greater the discount in the INSS benefit.

“If the insured is going to live longer, it reduces the benefit a little so that the money can pay all that time, until the end of life. If the pandemic brings more deaths, then it reduces people’s life expectancy, it means that it is very likely that the social security factor would be greater”, he says.

When contacted, the Social Security Department did not inform, until the publication of this report, from which day the new discounts will begin to be applied. Last year, they went into effect on December 1st.

An extra month and a half of work

According to calculations by Conde Consultoria Atuarial, in comparison with the last IBGE table, there was an average increase in life expectancy of 43 days for those aged 40 to 80 years and an average reduction of 0.47% in pensions requested with the old factor is the new.

If the worker postpones the request for the benefit to February 2022 to compensate for the change in the factor, for example, with another one or two months of contribution, depending on the case, he will be able to return to the pension amount he would have now in November 2021, he informs consulting.

Although the difference between one table and another is small, Newton emphasizes that it is a difference that will be paid for the rest of the worker’s life.

See the benefit amount

For an insured with 57 years of age and 37 years of contribution, the difference in benefit will be 0.40%. See the variations according to the average salary:

Who retires by toll

The toll transition rule is applied to workers who, on November 13, 2019, when the Social Security reform was published, already had contribution periods between 28 and 30 incomplete years (women) or between 33 and 35 incomplete years (men ). In order to obtain the 50% toll benefit, the INSS requires these workers to contribute for another 50% of the time until they reach 30 years of contribution (female) or 35 years (men).

A man, for example, who was two years away from retirement at the start of retirement would have to work another year to pay the toll, that is, he would have to work another three years in total to claim his benefit. See the other transition rules and who can apply for INSS retirement by the end of the year.​

villain of retirements

Created by the Fernando Henrique Cardoso (PSDB) government with the aim of forcing workers to postpone their retirement, especially for those in their 50s, the factor represents a discount on a large part of the benefits for time of contribution requested below 60 years .

Since December 2000, the accumulated reduction of the factor has reached 20.1% for men and 18.3% for women, according to Conde Consultoria. Last year, the update of the factor generated an average reduction of 0.73% in pensions.