Remuneration of inactive military personnel distances itself from INSS retirements

The remuneration of inactive military personnel and their pensioners cost an average of BRL 146,200 per beneficiary in 2021. The value is 6.4% higher, in nominal terms, than that observed in the previous year and indicates a faster growth rate. faster than among INSS (National Social Security Institute) insured persons or civil servants.

In the INSS, the average expense in 2021 was R$ 22.6 thousand, or 5.6% higher than in the previous year. In the civil servants’ own regime, the average expense was R$ 114.7 thousand, a nominal drop of 3.4% on the same basis of comparison.

The estimates were obtained by Sheet from official data sources. The National Treasury records the total annual revenues and expenses with each scheme, and the Ministry of Labor and Social Security publishes the number of beneficiaries until 2020.

The number of beneficiaries for 2021 was extracted from the annexes of the 2023 LDO (Budget Guidelines Law) project, which outlines projections of expenditures, beneficiaries and sustainability of these systems for the coming decades.

In 2020, the National Treasury itself calculated expenditures by beneficiary of each regime for the period from 2010 to 2019, at a time when the economic team and the TCU (Union Court of Auditors) fought an arm wrestle with the Armed Forces in search for greater transparency in the disclosure of this information.

The account, which helped to expose the disparity between the regimes, was included in the National Treasury Accounting Report for that year. However, the continuity of the estimate was hampered in the latest editions of the document – ​​the most recent was published this month.

When the revenues collected in each regime are considered, that of the Armed Forces soldiers also has the largest individual gap, with R$ 123,400 per beneficiary. In practice, this means that the Union needs to direct resources collected from other tax sources to cover these obligations.

In the civil servants’ pension system, the deficit per person is R$ 62.2 thousand. In the INSS, the amount is R$ 7.9 thousand. However, these schemes rely not only on contributions from participants, but also from employers, which increases revenue.

Formally, the military system is not classified as a social security system due to the particularities of the career, such as the possibility of summoning the inactive in the event of an armed conflict.

Despite the conceptual difference, the TCU has ostensibly demanded greater transparency. In March this year, the court’s plenary acknowledged the peculiarities, but reiterated that the system must “meet the principles that guide long-term budget planning and responsible fiscal management.”

In addition, experts say that the last reform promoted in the military protection system was more timid than it should have been, and the maintenance of benefits continues to boost spending on the category.

The bill was presented and approved in 2019, during the first year of the Jair Bolsonaro (PL) government, who is a retired army captain.

While the Social Security reform tightened the rules for calculating benefits for private sector workers and federal civil servants, as well as their pensioners, the new law for the military maintained privileges such as full payment of pensions and the possibility of accumulating benefits.

In the INSS and in the civil servants’ regime, the insured must contribute for 40 years to be able to retire with a benefit equivalent to 100% of the average contribution salary, in the case of men. The military, on the other hand, take the full amount of their remuneration to the reserve, regardless of the moment of their migration.

Another difference is seen in the death benefit. Under the rules of the INSS or the civil servants regime, it is equivalent to 50% of the pension that was paid or of the benefit to which they would be entitled if they retired due to disability, plus 10% per dependent. A childless spouse, for example, would receive 60%, respecting the minimum wage (R$ 1,212 in 2022).

In the case of military pensions, the benefit is always granted in full, although it can be divided when there is more than one dependent eligible to receive it.

Civil servants are also subject to the payment of a much higher contribution rate, up to 22% according to salary, while military personnel pay the equivalent of 10.5% of their salary.

Juliana Damasceno, senior economist at Tendências Consultoria and associate researcher at Ibre/FGV (Brazilian Institute of Economics of Fundação Getulio Vargas), recognizes that the military system has different characteristics from the INSS and the civil servants regime, but states that the reform applied to the Armed Forces was lenient.

“The approved text did not eliminate all distortions because it brought a series of bonuses and perks that were not in the military’s retirements”, he says.

The specialist says that there is a difference in nature in the exercise of military activity, which leads to a discussion about the minimum age for the category, for example. The establishment of a minimum age was one of the main points of the reform for the other workers.

“But on the issue of full benefit, the soldier who enters the reserve continues to receive his active salary and still receives the readjustments. It is a disparity that does not happen in other countries, such as the United States, England. All of them have a certain fall [na remuneração da reserva]”, says Damasceno.

She also emphasizes that the so-called integrality and parity, which ensure total remuneration and with readjustments equal to those of active workers, were maintained on salary averages that are already high.

According to the annex on the military system in the PLDO 2023, inactive military personnel receive an average of R$21,259.41 in the officer careers, and R$8,916.49 among enlisted personnel.

In the civil service, integrality and parity were extinguished for new servers at the end of 2003, and in most careers only employees who joined before that date are still entitled to the benefit.

The reform of the military also incorporated a series of readjustments in the remuneration of the Armed Forces, which contributed to reduce the power of the proposal, especially in the short term.

Economist Paulo Tafner, a specialist in Social Security and director-president of the IMDS (Institute of Mobility and Social Development), says that the readjustment was due, as the wages were out of date and often lower than those received by state military personnel.

“In 23 states, the military police colonel earned more than the Armed Forces colonel. You can’t, it’s a subversion in the salary hierarchy. There had to be a realignment. The moment was not good”, evaluates Tafner.

However, the economist recognizes that the proposal could have advanced in topics such as the integrality of pensions. “The military took the oath to the flag, but their spouses did not,” he criticizes.

Another point that should be changed, according to him, is the authorization for the accumulation of pensions — a more benevolent rule than in the INSS or among civil servants. “If the father is in the Air Force and the mother is in the Navy, they both leave alimony,” he says.

According to Tafner, the INSS and civil servants reforms had a faster effect, with the entry into force of transitional rules.

The National Treasury itself has already identified a significant improvement in the projections of the INSS, whose deficit today should go from 2.5% of GDP (Gross Domestic Product) in 2023 to 7.0% in 2060 (before, the finish line was much worse , with a gap of 11.64% of GDP).

“In the military, the opposite occurred, first they had a good increase in remuneration and, in a second moment, the effects of the reform appear”, says Tafner. In the long term, however, the downward trend in the number of the Armed Forces should reduce the deficit.