Brazilian pays R$9,600 per month to each retired soldier

Brasilia DF) – The discussion about social security expenses was forgotten after a major reform in 2019. There was a reduction in Union expenses in the first years. However, deficits are still heavy, as contributions are insufficient to pay for all withdrawals, especially among the military, experts warn.

Economist Paulo Tafner, one of the leading specialists in Social Security, says that spending on inactive employees in the public service is still high. In several states and municipalities, it has already surpassed spending on assets, for example.

“A lot of people in the public service came before 1998, when the reform took place, they have the right to full coverage and are still going to retire”, he says. “I believe that, at some point, spending on inactive employees will even prevent wage increases for active workers.”

In the case of the military, he recalls that the changes were made in 2019 through a bill, as the topic is not a constitutional matter. The same rules were implemented for the Armed Forces at the federal level, PM and firefighters in the states. Its effects, however, are not as effective as that of civilian reform.

“Improved over what it was, but the measures for the military were modest compared to what they could and should be,”

says Tafner.

Shortly after the reform, the then Ministry of Economy estimated that the Union would have savings of R$ 10.45 billion in ten years with the reform of the military.

The difference between what is disbursed to cover benefits and what is actually spent to pay monthly, reservists and pensioners is a demonstration of the financial mismatch , explains economist Felipe Drumond, consultant at República.org, an entity that works to broaden discussions on civil service in Brazil.

Parallel Drumond made based on data from the Anuário Estatístico da Previdência, the Aeps 2021, published in November 2022, which consolidates the most recent information.

In the case of the Union, the annual revenue for military pensions covers around 15.5% of total benefit expenses. The difference falls into the National Treasury account. As the money comes from taxes, Drumond explains that it is as if all Brazilians bear the expense to cover what is missing.

Considering the total annual deficit, around R$47.7 billion, and the number of beneficiaries, which reaches 396,000, Brazilians disburse, every month, around R$9,603 for each reserve soldier and their pensioners.

Union civil servants cover 46% of expenditures on benefits. The deficit is almost equal to that of the military, R$48 billion, but the number of beneficiaries is much greater. There are around 784,600 retirees and civilian pensioners, which creates an extra per capita monthly cost of R$ 5,111 for Brazilians.

The weight of the military is very disproportionate, says Drumond. Miliary officers and their pensioners together amount to practically half the number of civil servants, but cost almost twice as much, he explains.

Scholar of Social Security, economist Fabio Giambiagi assesses that Brazil has had difficulty dealing with any issue related to the Armed Forces since the end of the dictatorship, which includes the Social Security debate and the impact of the category on spending.

“For those who retired at the INSS, we went there and said: you will have pushed retirement forward. Let’s delay seven to eight years. It had to be done, it was the heart of the reform and, in the end, everybody accepted”,

recalls Giambiagi.

“In the case of the military, they pushed the retirement period a little bit, but to compensate, they changed the career structure, which increased investments in active duty and had the impact of also increasing retirement later on.”

According to him, the picture of spending on servers makes clear the already disproportionate weight of the category.

According to data from the National Treasury and the Ministry of Planning and Budget for 2022, the Union spent the equivalent of 1.77% of GDP on active employees, including military personnel, plus 1.53% on inactive employees. Total spending on servers was 3.3% of GDP.

Fractionating each expenditure between civilians and military of the Executive, Legislative and Judiciary, the military represents the first expense in the group of pensioners and the second among active and retired, surpassing the Judiciary, whose victories are usually highlighted by the high value. Of the 3.3% of total spending, 0.95% is already spent by the military.

“Brazilian society, at some point, will need to discuss what it wants from its military”,

says Giambiagi.

The situation is also complicated in the states and the Federal District. Civilians manage to cover a little more than half of the deficit and, even with the reforms carried out in many units of the Federation, they still generate a deficit of around R$ 74 billion per year.

Monthly, the state Treasuries spent, on average, almost R$ 3,000 per capita to cover retirement and pensions for 2 million civil servants and pensioners in the federal entities.

The military, in turn, covers 20% of social security spending, which generates an annual shortfall of R$38 billion. The Treasury, on average, disburses R$6,700 per capita monthly to complete the benefits of 472 thousand reserve PMs and pensioners.

The PM states that it made its contribution after intense negotiation with the category.

“We had our reform, and it wasn’t small, no”, says Marlon Jorge Teza, colonel of the Military Police of Santa Catarina and president of the National Federation of Entities of State Military Officers (Feneme).

Teza remembers that there was a discussion about the permanence of the Military Police in the states and how to treat it when the debate on the pension reform came up.

“There was an understanding of what the PM represented and the need for it to be maintained, but they warned: there will be a pension reform for citizens and we need to make changes to the PM’s social protection system, because it cannot stay as it is. We accept the effort of negotiating with corporations”,

says Teza.

According to him, the military cannot be treated the same as the civilian, because the dynamics of the role are very different.

“Around the world, military forces follow different rules, are subject to stronger legislation and have limited rights, including civil rights, because they are available to the nation in times of crisis and must comply with rules without hesitation. Military personnel lose rights, they take risks and expect retribution at the end of their lives, and this is retribution”,

says the colonel.

“If you want us to be equal to civilians, ok, make us civil, with the same rights too, and whatever God wants.”

Internal reporting to the Ministry of Defense and made contact with military segments to talk about the reform. There was no position until the publication of this text.

SOME POINTS OF THE MILITARY REFORM

• Increased the minimum length of service to be entitled to join the paid reserve (military personnel do not retire) from 30 to 35 years, including for women, who in many states were able to retire after 25 years of service; there is no minimum age
• Previous annual readjustments for military personnel until 2023
• For the Armed Forces, additional military availability compensation was created, which varies, depending on the rank, from 5% to 32%; for general officers, the percentage ranges from 35% to 41%
• He raised the contribution rate for active and inactive people, for military pensions, from 7.5% to 10.5%, and for pensioners the collection also increased to 10.5% (there is no range of freedom in discounts, as occurs with civilians); In some cases, the rate can reach 13.5% for non-disabled daughters who are lifelong pensioners (a type of Armed Forces that does not exist in the PM)

*With information from Folha de S.Paulo

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