Pension reforms in Brazil and the expansion of supplementary pensions

Abstract

This article highlights how the pension reforms produced in Brazil since the late 1990s contributed to the expansion of private supplementary pension schemes. Restrictive and ambiguous measures, adopted by different government coalitions in the course of these reforms, made public pensions in Brazil less attractive by setting limits on the receipt of pensions from public servants, also promoting significant reductions in the rates of replacement of income from benefits linked to the public pay-as-you-go system. Based on the literature on institutional change, and contradicting stricter path dependence arguments, the proposed analysis seeks to demonstrate empirically how these measures helped to disseminate pension funds and private pension plans in Brazil, particularly among groups with higher income, resulting in the strengthening of the private pillar of the pension system.

Keywords:
Reforms; Social Security, Supplementary Pension, Pension Funds, Brazil