Sometime ago we have discussed about the generous public pensions in Brazil, stating what everyone already knows:
“Generous pension benefits have long been a magnet attracting workers to Brazil’s public payrolls, and a major contributor to a government deficit that stood at 2.6% of gross domestic product at the end of last year. The benefits go to a small but privileged group, retired civil servants; the costs cripple the government’s efforts to invest in economic growth.”
Now looking at the chart below (via The Economist), we must ask ourselves: how is this for generosity? Although we must admit, Italians take the word “generosity” to another level…
The Economist clearly corroborates with our views and go further with their comments:
“Brazil’s pensions are among the world’s most generous, too, replacing 75% of average income. Some of this is welfare spending intended to cut poverty. Rural workers aged over 60, and anyone poor and over 65, can get a pension of 622 reais—the minimum wage—without ever having paid into the system. But this only costs around 2% of GDP a year. The real culprits are rules that let contributing workers retire earlier, on bigger pensions, than anywhere else.
… As a result, most Brazilians retire startlingly early: at 54 on average for a man in the private sector, and just 52 for a woman. Survivors’ benefits have no age limits. Families inherit pensions in their entirety, meaning young, childless widows never need work. A tenth of all 45-year-olds are already receiving a pension.”
Work less, receive more… isn’t it crazy?